59. Tax is in Our Roles.


Tax is in Our Roles.
Bob Komives
::


Taxation is our tendency
to cooperate toward abundance.
It is the role of roles,
the sustenance of organization,
the carver of niches.

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Few economic proposals attract more interest in U.S America than strategies to balance the federal budget. If you fear what will happen if the federal government spends more than it takes in through taxes, your fear probably comes from your acceptance of an intuitive equation:


Spend = Income

As spokesman for both the fear and the equation, President Reagan complained in his 1987 State of the Union address that over the past half-century the United States of America had outspent its means. For many people his complaint portrayed well the problem facing the country. To others, his words sounded like a cover-up for the national debt that burgeoned during Reagan's years as president. For me, Reagan's complaint reinforced my doubt in the validity of the problem as popularly stated. After all, despite some downs and ups, the country prospered during those fifty years. Some disadvantaged groups fell to further disadvantage. Yet, income, defined as growth in national wealth, increased.

Paradoxical.
Fifty years of lousy national management,
fifty years of deficit
between revenue and spending,
bring fifty years of unprecedented wealth.

Conventional explanations:
(1) We finance deficit,
sell the deficit to our citizens.
(2) We exploit
environment,
minorities,
other countries,
to make up the difference,
(3) Private enterprise makes up
for the failings of government.
Attractive and defensible explanations!

Yet, now a quandary.
Does bad management make a country wealthy
if it borrows from its citizens,
fosters private enterprise,
exploits poorer countries,
weaker citizens,
and a defenseless biosphere?

I offer two other explanations:

(4) SPEND has nothing to do with INCOME
when we correctly account
national government's attempt
to tax its own currency
back to itself
in order to spend it again,

(5) SPEND always equals INCOME
when INCOME refers to LEGITIMATE TAX.

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There are at least four legitimate taxes: tax in law or custom, tax in money, tax in kind, and tax in price. Each type offers advantages but is often interchangeable with the others.

Legitimate taxes start with communal policy; call it government policy. The taxes take effect when society responds. Society adjusts its pattern of role playing, creating a new distribution of wealth. Singers, carpenters, and bakers ply their trades in new ways and places. They change trades, change the way they ply their old trades, produce different products and services, change their consumption, move to new towns, go back to school. They alter their roles in society. In short, they pay their taxes. They are well taxed if their changed roles create new wealth and protect old wealth. A society that is well taxed has it's budget in balance.



:: Bob Komives, Fort Collins
© 2006 :: Plum Local IV :: 59. Tax is in Our Roles ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

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