Sorting Through the Analog to Digital TV Mess

H_Fisher writes "CNN offers an article from Fortune magazine, giving a look at the problems surrounding the mandatory switch from analog to digital TV in the U.S., now slated for 2009. 'Managing this transition -- which will render about 70 million TV sets obsolete -- will be not be easy,' Marc Gunther writes. Among the problems: millions of American households without cable or satellite access will lose free access to news and weather along with the rest of their broadcast fare. Uncle Sam's solution? 'Yes, the very same federal government that is cutting back on college loans and food stamps will soon be issuing TV vouchers' - $1.5 billion to help U.S. households buy new digital TV equipment."

Comments

What the?

[CaffeineAddict2001]

If you are poor, elderly or uneducated TV should be the last thing you are worrying about.

This really gives some credit to the theory that the primary purpose of television is to pacify people and have them forget the real problems they face.

A phased approach would be better

[tchuladdiass]

Instead of the analog signals being cut at a certain date, I think a better approach would be to decrease the output power of the analog signal by, say, 20% a year over the course of 5 years. That way, people with existing sets won't be forced to suddenly buy new equipment. Those that don't upgrade will just get a gradually weaker signal. A weak signal will cause people to want to upgrade (or get a cheap digital -> analog converter box), where as a suddenly cut off signal will make for angry viewers.

Re:Damned if you do, damned if you don't

[Surt]

http://www.taxpolicycenter.org/TaxFacts/Tfdb/TFTem plate.cfm?DocID=221&Topic2id=20&Topic3id=22

http://answers.google.com/answers/threadview?id=20 50

While the Top 20% may pay 60% of the tax, they hold 80% of the wealth.
The bottom 50% hold less than 5%.

So maybe the tax burden on the top 20% should be a little higher, as they are currently being taxed at a low rate in proportion to their benefit.

Re:Damned if you do, damned if you don't

[uncqual]

The notion that the tax burden should depend on ones "Wealth" is dangerous.

"Wealth" is very different from "Income" while "Consumption" is very different from both. Taxes can be levied on any of the three items (or others of course).

The current U.S. personal tax system primarily taxes "Income" (income tax) and, to a lesser extent, "Consumption" (as in sales tax and "luxury" taxes).

The only significant personal "Wealth" tax in the U.S. that comes to mind is property tax. Generally property tax is very progressive - the poorest pay little direct property tax (they tend to rent or live in low cost housing) while consuming the bulk of the benefits (subsidized public health programs, transportation, and education) and the highest income individuals tend to pay high direct property taxes (since they tend to live in expensive homes and own businesses) and reap few if any of the direct benefits (they pay for their own health care [and more], rarely use public transportation [except for politicians who want to make a point], and send their children to private school).

So, what is the "fairest" thing to tax? The usual claim of "unfairness" in the U.S. system of taxation seems to, at the root, be that individuals who enjoy a lot of creature comforts don't pay their "fair" share compared to individuals who have a minimum of creature comforts. It turns out, these creature comforts are a direct result of consumption, not income or wealth.

The only way to substantially enjoy ones wealth is to spend (i.e., consume) it - if you have $1B USD in corporate bonds and stocks and spend only $20K a year, your lifestyle is not much different from a fairly low paid worker BUT your $1B is helping create and sustain jobs. Sure, you're getting a revenue stream from your investment, but obviously less than what someone else thought the assets were worth (else there would have been no willing sellers of the stock you own or willing borrowers of your money) and your lifestyle is not improved by this revenue stream. This investment revenue stream must just be being plowed back into creating and sustaining more jobs (unless you're a horrible investor!) since at most $20K/year is being consumed for creature comforts. Sure, you have a greater feeling of "well being" because you have money for a rainy day which the fairly low paid worker doesn't - but taxing "feelings of well being" seems odd (presumably that would result in taxing those who follow a religion since a feeling of "well being" is something that most religions tout either explicitly or implicitly and would also result in very rich, but emotionally depressed, people paying no taxes).

Consider two single developers working side by side at similar jobs and both earning a salary of $75K/year (for the moment, ignore taxes since "appropriate taxation" is the issue we are addressing):

The first (call them "Mr. Frugal") spends $25K/year ($10K for a studio apartment, $15K for other stuff) and owns an old car, a 20 year old 19 inch color TV, eschews cable TV, and has a wardrobe consisting mostly of t-shirts with product and company names on them. The remaining $50K a year is invested in stocks and corporate bonds.

The second (call them "Mr. HighRoller") spends $75K/year ($25K for a nice apartment, $50K for other stuff) and always has a nice current model year car, a high end HD TV not more than three years old, the best of cable TV packages, and a wardrobe full of the latest designer labels. Since there is no "remaining" money, HighRoller saves or invests nothing.

After working for 45 years, Frugal has well in excess of $2.25M (inflation adjusted of course and assuming the investments were not too stupid) and retires comfortably - never requiring a penny of public assistance. On the other hand, HighRoller retires with NOTHING (except rapidly depreciating designer clothes, HDTV set, and high end car) and ends up living on Social Security