Say Anything Blog

Okay, I’ll explain.  Building and maintaning roads costs money, lots of it.  If the government doesn’t collect that money as tax, it just runs a deficit by selling bonds upon which you pay interest to the holders.  The interest payments are paid from the general fund, which is fed to a greater and greater degree by taxes on personal income.  If the govt. don’t raise taxes to pay the interest, then it does what its doing now, and it inflates the money supply and reduces the value of your cash assets and future earnings.  This wealth transfer from from individual to goverment is a defacto tax- but leavied in an arbitrary fashion.

Your point is important because it highlights a common mis-perception.  In the future gas tax increases should be accompanied by a simultanious reduction in some general tax to give people the idea.  The idea is that the more services you demand from your governement, the more money the goverment will demand from you.

The thing that people forget is that tax collected at the pump is in leiu of tax collected from your paycheck.

No it is not. It is just another tax that is added upon what you already pay.

I’ll hand it to Kerry to support the gas tax. Its courageous for a politician because you know there is going to be a certain amount of the population that doesn’t get it.

Perhaps you can explain it to us.

Sure everybody hates taxes but if you accept that there are certain activities that the government needs to do then you have to find a fair way to pay for them, and a fair way to apportion their consumption.

The gas tax is very good way to do that.  The thing that people forget is that tax collected at the pump is in leiu of tax collected from your paycheck.  Sure its in your face, but a dollar is a dollar, whether you pay in your check or you pay at the pump.

I’ll hand it to Kerry to support the gas tax.  Its courageous for a politician because you know there is going to be a certain amount of the population that doesn’t get it.

And by the way, running deficit to build roads is worse than a gas tax.  We then have to pay interest on top of the cost of the actual costs or equivalently, the cash and wages that Joe Lunch box make are devalued by the continuous inflation used to pay off old debts when the goverment increases the money supply arbitrarily.

Jay: Or, the govt should be forced to stop regarding our taxes as some sort of entitlement, and be forced to operate with some fiscal responsibility.  I know that is a far-out concept, but otherwise we are caught in an ascending spiral of govt spending and taxation.  We might want to give controlling govt spending a try.

There is a problem with the gold standard.  It severely limits growth and encourages imperialism as a method of increasing a country’s gold supply.  I know there are price adjustments, but let’s face it: some amount of deficit spending is necessary to fund the capital base for the next phase of growth.  What we need is a way to inhibit the growth of govt, not business or investment.  The govt is the source of inflation.  Maybe two constitutional amendments: one, fixing the maximum tax rate(total), and the other one mandating a govt balanced budget, within a few percent in any given year.  Then, all politicians would have to support economic growth as a way of increasing their pot of money.  It might work.  Our Constitution was designed to evolve through the amendment process, not through the courts.

Jay said, In the future gas tax increases should be accompanied by a simultanious reduction in some general tax to give people the idea.

The key words in your comment are “should be”. It doesn’t work that way in practice though.

If I was in charge I would move the country back to a strict gold standard.

Agreed. I’d add silver in there as well (it is still called the “gold standard” for some reason).

Ya I agree, but I fear the system has taken on a life of its own and its behaviour is now out of the hands of the individuals that live within it.  Just recently I heard some politico say that he didn’t like pork, but he wouldn’t put down his pork unless everyone else did and I just don’t see that happening.

So I think the solution is going to be in the form of a new system, perhaps after this one eats itself.  Seems to be the natural order of things, who are we to think we can do any different.

I used think the Reps were the fiscal conservatives but there has been a paradigm shift since Bush 2 where they just have their own favorite pork.  They figure if the government is going to be handing out money, might as well be THEIR friends.

If I was in charge I would move the country back to a strict gold standard.  And none of this fractional reserve B.S. either.  Abolish the federal reserve.  Of course politicians would hate that, because it would limit the amount of money they can hand out, how would they get relected?  You can thank our heros FDR and Nixon for taking us off gold in the first place.  Did you know Newton invented the gold standard?