🚀 go-pugleaf

In <30CF5134.2781@eng.eds.com> "Timothy S. Campbell"
<tcampb01@eng.eds.com> writes: 
>
>Quentin Lewis wrote:
>
>> But you HAVE NO CHOICE! With a sales tax, you can be a little
>> discriminating about how much tax you give them, and how much you
save. It
>> would be a very good incentive to save.
>> 
>> You currently have very little insentive to save, and when you do,
the
>> returns (and the already taxed income) are then taxed. You might as
well
>> spend it and enjoy it now.
>> 
>> -Quentin
>
>Actually the government would prefer if you DON'T save. I'll
illustrate:
>
>Say you earn $10 and you put it in the bank for a year before you
spend it.
>The government will tax, oh, say $3 worth of your ten (leaving you $7)
and you'll earn a
>few pennies over the year (interest -- well actually if only had $10
bucks in the bank,
>most modern banks would eat through "bank service charges" in nothing
flat and get gain
>would have a minus sign in front of it) and they'll take one or two
more pennies (some
>percentage) and then you'll spend it and pay a few more penies in
sales tax (unless you
>use it for gas, cigarettes, or liquor in which case they'll take a LOT
more pennies).
>Generating a net revenue of between $3 & $4 for the government.
>
>Now assume that, instead of saving, you decide to spend that money the
first week, the
>person who receives it is then taxed then then they in turn spend it
on something else
>(and pay a tax) then the new receiver spends it, etc. (you get the
picture) the taxes on
>that SAME original principal (which is being whittled down to nothing
eventually) keeps
>getting re-taxed during the course of the year. Eventually the
government ends up with
>most of the $10. 
>
>But... if you're spending money on merchants than they're selling more
product and need
>more workers to support the stores, manufacturing of product, etc. so
it creates more
>employment and creates a healthier economy. This makes it easier for
YOU to get a higher
>paying job, making it less necessary to save your money because
"they're always be more
>of it where that came from". So your $10 will quickly be replenished
by next weeks
>paycheck. In the meantime it creates more revenue for the government.
>
>The more rapid turnover of money creates a healthy economy. Saving
hurts the economy.
>People generally save when they believe "bad times" are ahead (it's a
mental thing). But
>it becomes a self-fulfilling prophecy because if enough people believe
it, then enough
>people save, stiffling the economy until bad times really do happen.
>
>Money can only work for people if it flows. If the flow of it stops,
then more people
>are hurt.
>
>This is a rather simplistic view of economy and was the basic strategy
of the
>"Reagan-omics" of the 80's (actually Kennedy had the idea before
Reagan and somebody
>else may have had the idea before him). During the 80s, the treasury
did report that
>income to the government was sharply UP... but so was the national
debt.
>
>The Democrats will claim that Reagan's "voo-doo economics" didn't
work. But what is
>undeniable is that revenues WERE up, so in some capacity the theory
did in fact work
>(this point is not disputable). The Republicans naturally blame the
Democrats for the
>failure (who controlled the House at the time) for spending more
government revenues
>than the government was generating (it is also undeniable that
Congressional spending
>was sharply UP and is a matter of historical fact than Democrats
controlled congress).
>Whether Democrats are completely responsible is a "leap".
>
>As we are all witness to the recent government shutdown (and possibly
preparing to
>witness another) we know that in fact, the congress DOES write and
approve their own
>budget bill which is later signed (or vetoed) by the president. If a
veto occurs, a 2/3
>majority of Congress can over-ride the president's veto. So a unified
congress can
>basically spend anything they want (the president can't do this). The
president does
>outline a budget plan of his (or her, although we have never actually
had a "her" --
>this maybe sexist and I'm sure that at least in part, it probably is),
but ultimately
>this is a guideline passed to congress which they can completely
ignore. If one
>political party doesn't dominate a 2/3 majority of the house, than
they probably need to
>get the president to "go along" with their plan and should entertain
the president's
>budget guidelines/ideas if they expect the president to sign the plan.
>
>Being a moderate myself, I would assert that anyone watching what
happened during the
>80s and watching what's happening now cannot escape the conclusion
that BOTH SIDES share
>the blame.
>
Unless that $ is taken out into the backyard and buried in a coffee can
 or burned, it's invested somewhere.  If it's invested somewhere, IT'S
WORKING!!!!!!

>----------------------------------------------------------------------
> Timothy S. Campbell - EDS CSTS/Enterprise Network & Compute Services
> Internet:  timothy.campbell@eng.eds.com
>----------------------------------------------------------------------