Sales taxes tend to be disproportionality hard on poor people for the reasons stated by others, but there's more to it than just poor people can't afford as much.
According to Ramsey's theory, in order for a sales tax to be effective, you tax the things with inelastic demand more than you tax the things with elastic demand.
Well, guess what has inelastic demand? Necessities - food, water, shelter, etc. You can tax the hell out of these, and people will still pay for them, because they HAVE to.
Now, on the other side, if you tax the hell out of something with elastic demand (luxury items, like say a yacht), people just won't buy the yacht and the government will never see any of the money. Therefor, the taxes on these items have to be lower, so that (rich) people will still buy them.
Combine that with the fact poor people have less money than rich people and you have a nice recipe for a good gap between the rich and the poor. (Which is interesting, since most socalist countries actually have a consumption tax system...)
Oh, and about Al Capone - the previous author's point was that he would have never been arrested and imprisioned, not that the government didn't get taxes from him. The government never tried Capone for his mob activities, just his tax evasion. If the government got rid of income tax, then they would get rid of a way to put away people they suspect of wrong doing but can't provide proof beyond a reasonable doubt. (Please, take note of the cynicism)
Note: Before you flame me, I'm just pointing out facts about having a consumption tax, not that I think it is/would be a bad thing...
Your analysis is majorly flawed; you need to take a refresher economics course. I'll lay one down for you. Savings = investment. Investment = growth. Growth = increased ability for production and consumption.
Any questions??
For more information on this, look up "Solow Growth Model"
If you want evidence that savings helps the economy look at post WWII Japan or Germany. Or, for the problems with too much consumption, look at South Korea presently.
You're not shutting me up, because you aren't responding to the argument.
A liberal arts degree isn't super easy and neither is going to law school afterward. Stop treating it like it is. Maybe EE is more difficult, but choosing liberal arts doesn't mean I'm taking the easy way out. I'm choosing something interesting. Sorry if trying to get the resistor to stay stuck in the breadboard isn't my idea of fun.
I never said all EE's are illiterate. Where the hell did you get that? I'm saying you have stupid people in your field too, just like liberal arts does. Yeah, some people who can't do math are taking it easy with their English major - just like some people who can't write are taking it easy with their EE one.
That's great, you took a law course and can read and interpret laws. However, that's a far cry from law school and passing the bar exam (or whatever the Canadian equivalent is - I'm sorry, I'm not familiar with the Canadian legal system).
Arts students, at least here in the US, are required to take a minimum of math and science just like EE students are required to take a minimum of English and humanities courses. Why does that make them less well rounded? Do I, as an Economics major REALLY need to know how to apply Kirchhoff's rules to find current any more than you REALLY need to know how to use an endogenous growth model to find potential GDP growth?? Why is it fair to say liberal arts majors need to take higher level math and science while engineering majors only have to take a minimum of macroeconomics (if even that!)?? I mean, it's great that you chose to do history, but the fact is it's not required.
I don't know where I said math was difficult, but I concede your point.
I don't think I'm compensating for anything - do you think I am?? If so, please elaborate. I think my analysis of your snide comment regarding arts degrees and law school was fair. Granted, some of my side comments were superfluous but I get pissed off when I hear people act like liberal art majors are doing nothing with their lives just because we don't want to be engineers.
Finally, your analysis about lawyers is misguided. Any profession that provides a service doesn't produce new goods. Surgeons and doctors don't produce new goods either, but you're not complaining about them. And while some lawyers are horrible people, you're generalizing too much. They're necessary in a complex society to determine right and wrong (or do you have a better way??). Don't judge an entire profession by a (relatively) few bad seeds. There are just as many shitty programmers.
Just for the record - as one of those people that plans to get a liberal arts degree then go to law school - law school isn't a picnic either.
I know some of you computer science and math people like to ride your high horses and pretend you're so much better than other majors, but you're full of shit. (Note: To those of you who don't do this, I'm not talking to you, so don't flame me...)
I'm an Economics major, I took calculus and calculus based physics, and I plan to take differential equations. Hell, I lost my 4.0 because I got an A- in Cal II (which was one of the better grades in my class and I even took it as an elective). So you can't tell me I took the easy way out... I'm not majoring in computer science (or math or EE or whatever) because, personally, I don't think it's as interesting and I don't want to do that for a living. I guarentee that my math and science skills are as good or better than most of the CS and related students are. Most of the people in my E&M class are failing and/or taking the class for the 2nd or 3rd time - and I'm the only one in there that isn't required to take the class... So please, don't generalize about the people getting "arts degrees."
In the name of fairness, why don't you go take the LSAT, score in the 90th+ percentile (because that's what it takes to get into a tier one law school), then go look at Havard's curriculum for law school (where you will be doing A LOT of pro-bono work and A LOT of case review, and taking quite a few classes...) and then tell me that law school is a cake walk?
Oh, and please, give me the names of the lawyers you know that are competent and work less than 60+ hours a week. Because all the ones I know wish they had the 40 hour (maybe 50 if there's a big project due) work week you probably have...
I think you (and many other computer scientists and related persons) cover up for your utter lack of English, history, art, and other "lesser" skills by touting math and science as the end all be all.
It isn't, so shut up about it. I know more than one EE major that can't pass his government class or is having trouble with English class, so I wouldn't say that going for an arts degree is the easy way out. You can't dumb down Beowulf or Paradise Lost either.
Not everyone wants to do what you do. Why are my life goals any less difficult or less commendable than yours just because I want to be a lawyer?
No, no one holds a gun to my head. But if I want one channel I do HAVE to buy 59 others.
The English language often has more than one definition for every word. Obviously physical force is not what I meant. Having a lack of meaningful alternatives was what I meant by "force." Attacking my argument on the basis of purposefully misinterpreting my rhetoric is a poor argument at best.
You are not being forced into doing anything. If you don't like the way Dish runs their business, buy from a competitor whose business practices you prefer.
None of the competitors change this practice. I could go without TV, you're right. But I don't want to. (I thought that was the beauty of the US: that I can fight for what I believe is the right thing... That I just don't have to chalk it up to a loss) I don't see why I should have a lack of alternatives with regard to practices that have already been declared ILLEGAL.
You could even start your own satellite company; that's the beauty of capitalism
I can't start my own company because the scales of production required and my lack of money to pay for capital prevent my from doing this. That anyone can do anyithing is a misconstruction of capitalism.
In a capitalist society there are such things as true monopolies- I don't know what economics books you're reading, but please let me know, because I'd like to read them. All of mine say that monopolies are economic inefficencies that definately do exist in many types of economies. (And I'm an economics major...)
Your analogy of a deck of cards is stupid. One card is not a product. I can't use one card on it's own. One television station is, and I don't need 6 other ones to use that one station. Please, let's be logical about this.
Anyone can, at any time, start a company that can compete with Microsoft or Dish or any other such giant company.
No, not everyone can start a company that can compete with these companies. That's what the very definition of a monopoly is - that one PREVENTS entry into the market place. Even still, that's irrelevant to my argument.
Beyond monopolies, there are other monopolistic practices, such as collusion, when all members of a particular market agree to perform a particular practice to keep prices high and prevent other companies from entering the market by refusing to let them have access to factor of production unless they adhere to these practices. And by bundling products so that other companies are forced to buy and sell groups of channel and consumers are forced to buy channels in groups of 60 seems to fall under this definition.
I'm not saying bundling channels is inherently evil - the option ought to exist, because like buying in bulk, it's probably cheaper. But there ought be an option not to have to purchase 60 channels if I want 3. I can buy a motherboard seperate from the processor; I can buy a deck of cards seperate from the poker chips; I can even buy my color ink cartridge seperate from my black one. Why shouldn't I be able to buy a channel without purchasing another channel?
Yes you are being forced to buy channels. You're ignore the fact that you CAN'T get a non-bundled set of tv channels. If any other sector of business did this, it would be illegal (Well, unless you're a certain software company, but that's another issue...)
Here in the US, we call this "collusion," which is a type of monopolistic behavior. It's also commonly regarded as "illegal."
True, it's not my right to tell someone how to run their bussiness - but it is my government's. And anti-competative practices (such as bundling the crappy FIT-TV and half a dozen spanish soap-opera channels just so I can watch Fox or FoodTV) are certainly within the government's jurisdiction under the "interstate commerce clause" of the constitution and have been declared illegal by numerous acts of Congress.
Hell, your argument means Microsoft's monopoly is okay too - after all, no one *has* to buy anything from them...
That's interesting since the US has one of the most liberal trade policies and,"ironically," the highest real GDP in the world. And, GDP has grown as trade has been futher liberalized.
And, your analysis about the WTO is interesting, since most economists would argue that smaller, poorer countries benefit the LEAST from the WTO (mostly because they can't fully take advantage of it, not because it's bad, but that's another argument...) For an empirical example, look at NAFTA - the US has benefited the most, meanwhile Mexico has benefited the least...
Saying that protectionism helps the economy is misinformed and violates the essence of capitalism. As someone else mentioned, go read up on comparative advantage. I can even give you a list of some good books on trade, if you're interested.
Oh, and those contries that "take our work?" We do get the advantage of cheaper costs of living - or rather, we would if the tariffs and other protectionist policies you advocate didn't drive prices up... The policies you advocate create the problems you whine about.
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According to Ramsey's theory, in order for a sales tax to be effective, you tax the things with inelastic demand more than you tax the things with elastic demand.
Well, guess what has inelastic demand? Necessities - food, water, shelter, etc. You can tax the hell out of these, and people will still pay for them, because they HAVE to.
Now, on the other side, if you tax the hell out of something with elastic demand (luxury items, like say a yacht), people just won't buy the yacht and the government will never see any of the money. Therefor, the taxes on these items have to be lower, so that (rich) people will still buy them.
Combine that with the fact poor people have less money than rich people and you have a nice recipe for a good gap between the rich and the poor. (Which is interesting, since most socalist countries actually have a consumption tax system...)
Oh, and about Al Capone - the previous author's point was that he would have never been arrested and imprisioned, not that the government didn't get taxes from him. The government never tried Capone for his mob activities, just his tax evasion. If the government got rid of income tax, then they would get rid of a way to put away people they suspect of wrong doing but can't provide proof beyond a reasonable doubt. (Please, take note of the cynicism)
Note: Before you flame me, I'm just pointing out facts about having a consumption tax, not that I think it is/would be a bad thing...
Your analysis is majorly flawed; you need to take a refresher economics course. I'll lay one down for you. Savings = investment. Investment = growth. Growth = increased ability for production and consumption.
Any questions??
For more information on this, look up "Solow Growth Model"
If you want evidence that savings helps the economy look at post WWII Japan or Germany.
Or, for the problems with too much consumption, look at South Korea presently.
You're not shutting me up, because you aren't responding to the argument.
A liberal arts degree isn't super easy and neither is going to law school afterward. Stop treating it like it is. Maybe EE is more difficult, but choosing liberal arts doesn't mean I'm taking the easy way out. I'm choosing something interesting. Sorry if trying to get the resistor to stay stuck in the breadboard isn't my idea of fun.
I never said all EE's are illiterate. Where the hell did you get that? I'm saying you have stupid people in your field too, just like liberal arts does. Yeah, some people who can't do math are taking it easy with their English major - just like some people who can't write are taking it easy with their EE one.
That's great, you took a law course and can read and interpret laws. However, that's a far cry from law school and passing the bar exam (or whatever the Canadian equivalent is - I'm sorry, I'm not familiar with the Canadian legal system).
Arts students, at least here in the US, are required to take a minimum of math and science just like EE students are required to take a minimum of English and humanities courses. Why does that make them less well rounded? Do I, as an Economics major REALLY need to know how to apply Kirchhoff's rules to find current any more than you REALLY need to know how to use an endogenous growth model to find potential GDP growth?? Why is it fair to say liberal arts majors need to take higher level math and science while engineering majors only have to take a minimum of macroeconomics (if even that!)?? I mean, it's great that you chose to do history, but the fact is it's not required.
I don't know where I said math was difficult, but I concede your point.
I don't think I'm compensating for anything - do you think I am?? If so, please elaborate. I think my analysis of your snide comment regarding arts degrees and law school was fair. Granted, some of my side comments were superfluous but I get pissed off when I hear people act like liberal art majors are doing nothing with their lives just because we don't want to be engineers.
Finally, your analysis about lawyers is misguided. Any profession that provides a service doesn't produce new goods. Surgeons and doctors don't produce new goods either, but you're not complaining about them. And while some lawyers are horrible people, you're generalizing too much. They're necessary in a complex society to determine right and wrong (or do you have a better way??). Don't judge an entire profession by a (relatively) few bad seeds. There are just as many shitty programmers.
Just for the record - as one of those people that plans to get a liberal arts degree then go to law school - law school isn't a picnic either.
I know some of you computer science and math people like to ride your high horses and pretend you're so much better than other majors, but you're full of shit. (Note: To those of you who don't do this, I'm not talking to you, so don't flame me...)
I'm an Economics major, I took calculus and calculus based physics, and I plan to take differential equations. Hell, I lost my 4.0 because I got an A- in Cal II (which was one of the better grades in my class and I even took it as an elective). So you can't tell me I took the easy way out... I'm not majoring in computer science (or math or EE or whatever) because, personally, I don't think it's as interesting and I don't want to do that for a living. I guarentee that my math and science skills are as good or better than most of the CS and related students are. Most of the people in my E&M class are failing and/or taking the class for the 2nd or 3rd time - and I'm the only one in there that isn't required to take the class... So please, don't generalize about the people getting "arts degrees."
In the name of fairness, why don't you go take the LSAT, score in the 90th+ percentile (because that's what it takes to get into a tier one law school), then go look at Havard's curriculum for law school (where you will be doing A LOT of pro-bono work and A LOT of case review, and taking quite a few classes...) and then tell me that law school is a cake walk?
Oh, and please, give me the names of the lawyers you know that are competent and work less than 60+ hours a week. Because all the ones I know wish they had the 40 hour (maybe 50 if there's a big project due) work week you probably have...
I think you (and many other computer scientists and related persons) cover up for your utter lack of English, history, art, and other "lesser" skills by touting math and science as the end all be all.
It isn't, so shut up about it. I know more than one EE major that can't pass his government class or is having trouble with English class, so I wouldn't say that going for an arts degree is the easy way out. You can't dumb down Beowulf or Paradise Lost either.
Not everyone wants to do what you do. Why are my life goals any less difficult or less commendable than yours just because I want to be a lawyer?
I was thinking "poor guy must have lost his other hand in a war or something" until my boyfriend corrected me...
No, no one holds a gun to my head. But if I want one channel I do HAVE to buy 59 others.
The English language often has more than one definition for every word. Obviously physical force is not what I meant. Having a lack of meaningful alternatives was what I meant by "force." Attacking my argument on the basis of purposefully misinterpreting my rhetoric is a poor argument at best.
You are not being forced into doing anything. If you don't like the way Dish runs their business, buy from a competitor whose business practices you prefer.
None of the competitors change this practice. I could go without TV, you're right. But I don't want to. (I thought that was the beauty of the US: that I can fight for what I believe is the right thing... That I just don't have to chalk it up to a loss) I don't see why I should have a lack of alternatives with regard to practices that have already been declared ILLEGAL.
You could even start your own satellite company; that's the beauty of capitalism
I can't start my own company because the scales of production required and my lack of money to pay for capital prevent my from doing this. That anyone can do anyithing is a misconstruction of capitalism.
In a capitalist society there are such things as true monopolies- I don't know what economics books you're reading, but please let me know, because I'd like to read them. All of mine say that monopolies are economic inefficencies that definately do exist in many types of economies. (And I'm an economics major...)
Your analogy of a deck of cards is stupid. One card is not a product. I can't use one card on it's own. One television station is, and I don't need 6 other ones to use that one station. Please, let's be logical about this.
Anyone can, at any time, start a company that can compete with Microsoft or Dish or any other such giant company.
No, not everyone can start a company that can compete with these companies. That's what the very definition of a monopoly is - that one PREVENTS entry into the market place. Even still, that's irrelevant to my argument.
Beyond monopolies, there are other monopolistic practices, such as collusion, when all members of a particular market agree to perform a particular practice to keep prices high and prevent other companies from entering the market by refusing to let them have access to factor of production unless they adhere to these practices. And by bundling products so that other companies are forced to buy and sell groups of channel and consumers are forced to buy channels in groups of 60 seems to fall under this definition.
I'm not saying bundling channels is inherently evil - the option ought to exist, because like buying in bulk, it's probably cheaper. But there ought be an option not to have to purchase 60 channels if I want 3. I can buy a motherboard seperate from the processor; I can buy a deck of cards seperate from the poker chips; I can even buy my color ink cartridge seperate from my black one. Why shouldn't I be able to buy a channel without purchasing another channel?
Yes you are being forced to buy channels. You're ignore the fact that you CAN'T get a non-bundled set of tv channels. If any other sector of business did this, it would be illegal (Well, unless you're a certain software company, but that's another issue...)
Here in the US, we call this "collusion," which is a type of monopolistic behavior. It's also commonly regarded as "illegal."
True, it's not my right to tell someone how to run their bussiness - but it is my government's. And anti-competative practices (such as bundling the crappy FIT-TV and half a dozen spanish soap-opera channels just so I can watch Fox or FoodTV) are certainly within the government's jurisdiction under the "interstate commerce clause" of the constitution and have been declared illegal by numerous acts of Congress.
Hell, your argument means Microsoft's monopoly is okay too - after all, no one *has* to buy anything from them...
That's interesting since the US has one of the most liberal trade policies and,"ironically," the highest real GDP in the world. And, GDP has grown as trade has been futher liberalized.
And, your analysis about the WTO is interesting, since most economists would argue that smaller, poorer countries benefit the LEAST from the WTO (mostly because they can't fully take advantage of it, not because it's bad, but that's another argument...) For an empirical example, look at NAFTA - the US has benefited the most, meanwhile Mexico has benefited the least...
Saying that protectionism helps the economy is misinformed and violates the essence of capitalism. As someone else mentioned, go read up on comparative advantage. I can even give you a list of some good books on trade, if you're interested.
Oh, and those contries that "take our work?" We do get the advantage of cheaper costs of living - or rather, we would if the tariffs and other protectionist policies you advocate didn't drive prices up... The policies you advocate create the problems you whine about.