Spiralling Outta Control... Democrats Seek Millionaire Tax Surcharge
- Thread starter Tauvros
- Start date
I don't know about Virginia but I know that Maryland imposed some sort of "millionaire tax". So of course the rich people moved out and tax revenues from millionaires declined.
Remember that the federal income tax itself was originally touted as a "millionaire tax". Very few people had to pay it at first.
True. If you started working at 15 and retired when you were 65 at a job that paid an average of $20k for each of those years, that's 50 yrs x $20K = $1 million dollars.
$20k a year in 1913 was a princely sum, so "Let's tax the rich!" Today it is a starvation wage. That's how the lawmakers get new taxes past the voters.
There's nothing government loves more than inflation. Hell, Keynes himself pointed that out.
Government is always a net borrower and inflation allows it to pay off debt in depreciated currency. Of course, inflation has the effect of taxing the entire population, robbing them of their savings and all.
But, who gives a crap if you're Chavez. You'll get yours!
And so our dear leaders will get theirs while you are left to rot. I can't understand why some people don't understand how delightful big government is, can you? (okay...enough sarcasm for now).
Can I stop you right there?
I've heard that inflation is a tax, but I don't figure how. We as (relatively) free citizens have the right to indebt ourselves as well. If I take out a huge 30 year mortgage, I'm hoping for some inflation just like the gov't.
I can also beat inflation by keeping wealth not in cash, but in commodities (an ounce of gold, a bushel of wheat, a barrel of crude).
Inflation simply moves the decimal place to the right in money alone, it does not attack the inherent value of goods I own. That barrel of oil will move a car x miles down the road, and people will be willing to work y hours for it. Likewise a bushel of wheat will make x' loaves of bread, and people will work y' hours for a loaf. Doesn't matter if the oil is priced at 100 euro, 200 rubles, 300 yuan or 400 shiny rocks, whatever my medium of exchange it all balances out.
Right?
Sort of, although it's not that simple. When one talks about inflation being a hidden tax, it is in reference to savers, creditors and investors, and as such it punishes and discourages saving and investment. Retired people and others who live on fixed income are devastated by it. So are lenders and creditors, who are paid back over time in money that buys far less than it did when they lent it out, as well as many investors whose investments don't necessarily keep pace with inflation (see stock market 1965-1982).
While it is true that if you were to keep 100% of your wealth in hard assets or inflation hedges such as commodities and not in a fiat currency you would not be adversely affected by rampant and sudden inflation, the fact of the matter is that during periods of slow, steady inflation, such hedges cannot be counted on. From 1982 until 2002 the price of gold not only stagnated but declined, yet inflation continued during that whole time. So if you were in gold all that time because you thought it would be a hedge against inflation, you lost considerable purchasing power by the end of that 20 year period.
These examples show how inflation is a far more insidious and complex thing than just being able to park your money in an ounce of gold or a stock or a barrel of oil, and think that it will protect your purchasing power during all periods of inflation, because not all inflationary periods are created equal. And again, in general, inflation of any stripe robs fixed income savers, lenders and investors of purchasing power.