... the word "tax" is not always bad. ...

... the word "tax" is not always bad.

I suggest you read this opionion piece in the Fort Collins Coloradoan of March 9, 2011
.

Moderates need place at table to resolve impasse

.

.

They are the words of John Knezovich who calls himself a moderate Republican.
I'm not sure if John would agree, but I would call this well-written essay a plea for sanity and responsibility. Nearing the end of his plea Knezovich says simply this:
.

Most urgently, Republicans need to grasp that the word "tax" is not always bad. There are many governmental programs and services which benefit all of society. Where would we be without public safety, roads, schools, libraries, hospitals and social services?

 .
Yes, taxes are integral to civilization, and I dare say: "civility."
Thanks, John. I want to spread your word; then we can fight well over the details!

Capture Broadly

Capture Broadly

Bob Komives

::

Headnote: Solidarity is but

 conscious expression

of inter-dependence

for inter-prosperity.

Capture broadly--
   as leaf captures sun,
      mill captures wind,
         and gatherer gathers grain.
Distribute deeply--
   as leaf sends oxygen,
      mill delivers flour,
         and parent feeds child
            that teacher educates.
Recirculate densely--
   as we bake for our miller,
      who rewards our harvester,
         who buries our excess
               to reward the roots
                  who will feed new leaves.
                     to nourish grains of life.
 

Footnote: Community is but

 subconscious expression

of inter-dependence

for inter-prosperity.

Bob Komives :: Fort Collins © 2007 :: Capture Broadly ::0703
-------------------------------------------
co-posted on Komivesian Poetics

Planet Money and the Invention of Money

Thursday, January 20, 2011

Yesterday I sent a second of two emails to Planet Money giving my thoughts and applause to their presentation on the Invention of Money on NPR's This American Life: Sunday, January 7.  I highly recommend you listen to it and contemplate how it changes or adds to your view of money. I admire how articulate and concise they are in describing money's strangely magical qualities. They dwell on the truth that money is trust, a powerful and apt description. Alas, I regret that this may be the first time that the word trust appears in this blog. Thanks, Planet Money. Otherwise, I find support in their words--and much food for further thought. L I S T E N, then read my response:

2. Everybody Knows

Everybody Knows
Bob Komives

::

In 1990 and 1991, when the United States of America lead other countries in a war to evict the forces of Iraq from Kuwait, many advocates of balanced national budgets knew it was time to abandon that principle in order to wage war. I heard nobody ask, "If debt for war is good, can debt for peace and public welfare be bad?"

A war rages in the Middle East
—costly by measures more important than money.
We so readily
suspend our fantasy of a balanced budget
so that we may fight a harsh war,
only to again impose our fantasy,
with harsh futility,
during brief interludes of peace.

Oh, the insidious fantasy!
Never apologize for expenditures
if they do not exceed taxes.
That is, if government recalls from us
at least as much money as it spends,
it can boast:
" We ruined the country
and much of the rest of the biosphere,
but we never ran an unbalanced budget."
Let us remember
that war is the age-old medicine
to counter peacetime fantasies.
For failing to make good investments in peace
we are as likely as ever
to
fall
into
internal and external
conflict
that will lead us again to war.

from: A War Rages

Things are not as they should be. The cold-war dichotomy between communism and capitalism has blurred. It should now be easier to study the complementary relationships between socialism and marketplace, and between peace and investment. Yet, in the years since the war in Kuwait such discussions seem less frequent, or, at least, less noticed.

Also in 1991, leaders in the United States of America were in a panic over their failing banks. Those who had long advocated smaller, decentralized government were sure it was time for larger, more centralized banks. They now have them. I see irony in this past and problems in this future.

One panic replaces another. In 1996 everybody knew that the big problem in the USA was budget balancing --provided we increase military expenditures and decrease both our taxes on the wealthy and our assistance to the poor. In early 1998 the problem seemed to be what to do with a projected budget surplus if we do not wage war with Iraq. Yesterday and today everybody knows that, when convenient, national taxes must balance expenses.

Once upon a time, everybody knew
the earth is flat.
Common sense confirmed it.
Common politicians ratified it.
The best scientists of the day spoke doubts.
Since everybody knew,
nobody listened.

from: Everybody Knew

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV :: 2. Everybody Knows ::
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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19. We are Cursed And Blessed.

We are Cursed and Blessed.
Bob Komives
::

Life reproduces itself, but imperfectly. This imperfection creates an intricate, diverse biosphere.

Humankind has two traits that distinguish us from other species. I believe these traits contribute to our unique role in the biosphere.

We have a brain that has somewhat independent hemispheres in which we process information in at least two different ways at the same time. We have social systems that tend toward stability, but in which we often and inevitably undergo instability.

We seem cursed by the anguish of war between the conscious and subconscious and between the logical and intuitive factions in our brain. We seem cursed by bloody and bloodless wars between factions in our society.

Other species evolved with greater social order. Compared to our own, their brain parts seem to work in harmony. Our unstable society may well be a curse brought on by our unstable brain. Yet, our creative ability to explore the workings of the universe through art, science, engineering and fantasy is a blessing that we also owe to that curse. If there is to be a utopia, we must find it in how we manage our continuing instability.

All species can perceive scarcity in resources, and they see an apparent need to manage scarcity by preventing any change that instability will bring. We, alone, have the blind management power, at this tick in the evolutionary clock, to destroy life and its biosphere of change.

It is also only we who can hope to notice, midst war and destruction, the wealth that instability and change have wrought within our biosphere. Only we can hope to see that beneath the apparent rules of scarcity and competition lie more general rules for us to follow-
rules for abundance, and rules for cooperation.

Blessed Curses

Humankind seems cursed by its heritage of imperfection in ways that other species are not. Yet, we are blessed with a preeminent role in the biosphere. Richard Restak described well how our semi-independent brain hemispheres process two ways of thinking that are generally coordinated but often conflicting. This duality is mirrored in our culture. We experiment with: democracy, dictatorship, republic; polygamy, polyandry, monogamy; matriarchy, patriarchy; monarchy, anarchy. Only the human species has a restless urge to understand and perfect.

Competition seeks instability.
One individual,
one group
tries to gain advantage over another.
When too successful,
competition fails.
It can produce a stable dictatorship,
monopoly,
slavery.
Cooperation seeks stability.
It too can fail
if it is perfectly successful.
Stable wealth stops evolving.
Rebels appear.
Feeling stifled,
they promote instability.
We play hopscotch
through patterns of opposites:
cooperation or competition,
with
stability or instability.
War -unstable competition.
The marketplace -stable competition.
Tradition and rules -stable cooperation.
Invention and information,
though often spawned by cooperation,
bring change -instability.
Each pattern brings the other.
The market creates incentive for invention:
a better mouse trap,
a five-cent cigar.
Invention produces new traditions:
stay home
to watch a ball game at the park,
go to the park
to get away from my computer-cottage office.
A stifling tradition brings revolution and war.
We are special
because we can notice these patterns,
seek to understand them,
and decide to participate.

What Makes Us Special

If an objective visitor from outer space had arrived on Earth a few hundred thousand years ago she would have had to stay around to notice that we naked apes were in any way special. Today, she would quickly pick us out of the crowd. We have made ourselves quite noticeable. Electric hair dryers, tennis shoes, oil spills, and political conventions make us stand out clearly in the crowd of earthly creatures.

We see correctly that we are special, but we have tended to think incorrectly that we are special because we are better. "Better" is a subjective evaluation, but if we equate it with "more perfect" we are wrong. We are special because we are less perfect. We are cursed with imperfections that bless us with flourishing culture. Individually and in groups we play dynamic roles that never allow our species to settle into a comfortable niche.

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV :: 19. We are Cursed and Blessed ::
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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20. Family is Our Minimum.

Family is Our Minimum.

Bob Komives
::

There are no true rugged individuals.
Either they died
for lack of nurturers after birth,
or they were never born
for lack of lovers before conception.

Ruggedless

The science of ecology tells us how we share biospheric wealth with other species, often to our mutual benefit. We must share. No element of life is self-sufficient. We must tax other individuals and species; they must tax us. Humankind has no self-sufficient individuals. From Lewis Thomas in Lives Of A Cell, I learned that the mitochondria in our cells are but one of several kinds of creatures with their own genetic structures that live symbiotically with us, within us. We tax them for their knowledge in order that we might survive; human genes alone do not know enough to keep us alive.

Even if I were to refuse to recognize mitochondria as anything other than "me," I could not ignore the two people who had to undergo bisexual reproduction for me to arrive in this world. Then I cannot ignore that once I got here, during infancy and well beyond, I continued to depend upon adult nurturers for my survival and well-being.

To support bisexual reproduction and to solve the challenge of infant dependency we organize ourselves into families. Family is the minimum biological unit of organization for species survival. Many of us do more than survive. We depend upon our families and their particular patterns of role playing to do more than reproduce and nurture hunks of genes and protoplasm. Adults carry brain knowledge and have artifacts that they wish to distribute to their children and others. Family is the convenient minimum to carry out this complex wealth distribution. Through family we receive and pass along culture and experience. Thus, our adopted children--who carry none of our genes but carry knowledge that we acquired during life--may inherit and pass along more of what we are than do our biological children.

Family is the minimum--the macroeconomic minimum-- the smallest organ that our species knows can capture, distribute, and recirculate knowledge we need to survive and prosper. Since reproduction requires two people and produces a dependent, over time there must be at least three individuals in a family. The minimum number of roles to play, however, is four: father, mother, dependent, and nurturer. There are no maxima.

Beyond the biological minimum necessary for survival, our species has unique flexibility in choosing the family form through which one generation can pass biological, brain and artifactual knowledge on to the next. Adjectives such as matrilineal, patrilineal, extended, monogamous, and polygamous each describe a family pattern that has proved useful. Nouns such as nucleus, band, clan, tribe, chiefdom, city, federation, and even nation, describe scales at which family-type roles can operate.

Microeconomics is important because it helps us understand the dynamics of individuals (or even families acting as individual entities) who buy and sell goods and services in a marketplace. Some of these individuals may be close to rugged, but, here at least, we do not give a damn. What does it profit a man to control a market but suffer a dearth of things to trade? We cannot look to microeconomics to understand the dynamics that produced the market goods and services in the first place -nor the greater wealth that never goes to market. To gain that understanding we should be able to turn to macroeconomics and its minimum economic unit, the family, in all its forms. There we can hope to find out how our species reproduces, expands and nurtures its wealth.

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV ::20. Family is Our Minimum ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

21. From Family to Government

From Family to Government
Bob Komives
::

Parents in our nuclear family, our elders in our clan, our council in our city, our nation's government--each makes decisions for the benefit of one of our groups. National government differs in scale and organizational complexity from a family council, but not in function. Each represents an organized effort to promote role playing by group members. Members, citizens, hope that roles are played well enough to improve group and individual well-being. We are members of several groups; several decision-making bodies represent us. As we invent and join new groups many old ones persist. We happen to call a class of broad-reaching groups, or their representatives, government.

We have such propensity to form government in our groups that among our deeply embedded cultural patterns there must be one that causes us to produce and reproduce government. Provided we remember that all genetic action must occur within our true cellular genes, we can think of cultural genes for government.

These genes are persistent yet imperfect. Some stable societies evolved with stable forms for government. Yet, as our species flourished and spread its influence around the globe, new circumstances tested old forms of organization. Changes had higher likelihood of survival if they enabled the group to better invest group knowledge. Government gains respect among constituents and also among rival groups if it enables the group to organize itself to produce and protect more knowledge than it invests. Such successful government is likely to be imitated--just as successful biological parents are imitated.

Pick any important company in a marketplace country such as the USA. Do a thought problem. Consider the impacts on the nation if we eliminate that company.

Pick any whole sector of a market economy and do the same thought problem. Choose the farming sector, for example. Eliminate it--a disastrous thought.

Now do the same thought problem, but eliminate only government. If that is too difficult to imagine, eliminate only governmental protection of property, and governmental guarantees of public rights-of-way.

Government is family,
the industry we cannot do without.

||

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV :: 21. .From Family to Government ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

23. We Tax Ourselves When We Play Our Roles.

We Tax Ourselves When We Play Our Roles
Bob Komives
::

We cooperate; we compete. In both modes we exhibit freedom. At least, that is a view we can choose. In another view, we just play our inherited roles. "Role playing," "role differentiation," these are terms frequently heard among social scientists. They are also better and more general terms for what we and our economists call "taxation."

Role playing (1) distributes wealth among individuals, and (2) creates wealth when the roles are mutually beneficial. Number one is well understood by both charitable and exploitive people, by our tax collectors, and by other species--the more I get from you, the better off I am. Attribute number two is at the frontier of our understanding of macroeconomics.

During the dawn of life separate organisms that were accidentally different accidentally contributed to each other's chances for survival. Some produced offspring that had a tendency to organize themselves to reënact the ritual. As they did, role playing became part of the biosphere; taxation became part of the biosphere.

Each particle of DNA, each species, each individual, each group depends upon and is depended upon by other elements of the biosphere. Each taxes others and is taxed in turn within an intricately organized web of roles. On occasion, the quantity of life traumatically decreased. Despite such setbacks, life incorporated an increasing portion of universal energy into itself and into its complex support systems. As life grew, so did the complexity of the roles played by the organs and organisms that sustained it. Had we been there, at some point the complexity would have become too much for our great brains to comprehend. We would have to develop concepts of freedom, intention, randomness, in our attempt to understand cause-and-effect in what we saw. We would find words for cooperation and competition. In some order (perhaps simultaneously) science, pseudoscience, religion, and philosophy would follow.

As life flourished, new roles emerged, old roles changed. Through its organized role playing the biosphere learned not only how to prevent a net loss of biological energy (absent great trauma), but also how to capture more energy. In terms of biosphere economics, wealth steadily increased. While some species lost all wealth and became extinct, humankind prospered. Human economic history, when read from a distance, records changing patterns of roles that were adequate to keep us around and increase our wealth.

Role playing works because it distributes resources among individuals to the benefit of the group. An infant needs nurture, so it taxes its family to supply energy and skills to survive. Given survival, the infant can go on to contribute to the welfare of the family and to help produce another generation. Our tendency to nurture others lets us help individuals become scholars, artists, scientists and administrators. It causes us to make an effort to preserve life and opportunities for less fortunate people even when we seem to loose wealth in the process. We harvest and create food, education and security. Then we tax ourselves. We cooperate and compete so that we distribute these products and services among us. History is too full of examples of exploitation and persecution. We live with the guilt that comes with our unfortunately large margin for error. Nevertheless, so far, we tend to tax ourselves well enough to survive and occasionally flourish.

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV :: 23. We Tax Ourselves When We Play Our Roles ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

46. Money and Other Biospheric Taxes

Money and Other Biospheric Taxes
Bob Komives
::

Once in the marketplace, money simplifies the exchange of goods and services. This is the obvious effect that we all see. Less obvious is the tax-effect. Money is a mobile tax. Once government becomes a minter of money it engages in monetary taxation --inducing people with newly minted money to play roles they would not otherwise have played in the provision of goods and services. Light, portable, magical money shifts wealth flexibly from person to person and place to place --reorganizing society as it flows. True taxation occurs whenever a minting government spends its money.

Any country can invest in good projects using its own money. Within the country venders must accept national currency in exchange for their good or service. They will tend to do so voluntarily because good projects create wealth which new money lets them share. Thus, as good investment follows good investment, money becomes the common way to exchange wealth in the marketplace.

Money is a magical invention, but not a freak. It is but one invention by humankind in a chain of magical biospheric inventions that allow a whole to organize itself to be more than the sum of its parts. Whether several micro-organisms exchange energy, a family allocates chores, a culture defines roles and traditions, or a government mints money, the net effect is for the group to tax itself --to allocate resources in ways that individuals cannot or will not.

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV :: 46. Money and Other Biospheric Taxes ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

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.

||

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.

||

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

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

60. Tax in Law and Custom

Tax in Law and Custom
Bob Komives
::

We tax ourselves in law and custom,

rule and ceremony;
role and symphony.

As best we can,
we tend to our interaction.

||

Each of our formal laws, each of our less formal customs channels our actions. Each is a tax upon us.

"Thou shalt be available for jury duty."
"Thou shalt put x% butterfat in our ice cream."
"We shall send our children to school."
"Men should wear ties to church."
"Our employees shall not work on the 4th of July."

Be it law or custom, each of these rules for participation in society taxes citizenry by inducing or demanding individuals to allocate their resources --that is, to play new roles or to keep old ones. The resources collected and distributed have, in effect, been collected by society's tax collectors and spent by its administrators --mostly common citizens, but society's collectors and administrators none the less.

In U.S. America on July 4th, Independence Day, we get broadly taxed by our law and custom. The nation accomplishes the role playing it desires. Most people go to the beach or to their back yards on the 4th of July rather than to work. Human and material resources get taxed from one activity --the typical work day-- to another --celebration. The nation presumes that the holiday role playing is more beneficial than costly, so it takes resources away from a day's production in widgets and allocates them to a day's worth of celebration.

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV :: 60. Tax in Law and Custom ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

61. Tax in Money

Tax in Money
Bob Komives
::

Our government offers negotiable currency
to induce us to play our roles--

to provide goods and
to provide services
to support communal efforts.

In short,
our government mints and spends our money.

||

Most of us were taught that money is a means of exchange. Yes, once in the marketplace, it does simplify the exchange of goods and services. However, when first spent by government it is not a substitute for goods and services, but rather a mobile tax. Wherever our government chooses to spend it, our new money changes how we play our societal roles and allocate our resources. Each new dollar spent by our government reduces the market share controlled by old dollars --it reduces the percentage of marketplace goods and services that people holding old dollars can acquire. This is taxation, just as it would be if the government came to the door and physically collected the goods and services. Physical collection is unnecessary because our individual selfish acts, in pursuit of the dollars, collect the goods and services and take them to new places in the economy. Congress could, for example, decide to buy the July 4th holiday, compensating employers in cash. That would be a tax in money. Dollars spent by our government would attract employers and employees to a 4th-of-July holiday.

Most national governments mint and caretake a national currency. When they spend new money they tax their nations; when they spend new money they create income. Thus, the common balanced budget formula, "Spend = Income" is a tautology. It says only:

"Spend = Spend"
"Income = Income"

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV :: 61. Tax in Money ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

62. Tax in Kind

Tax in Kind
Bob Komives
::

In kind, we give to our government
some of our goods and our services ...

||

A group or its government might collect food to feed communal workers, fuel to heat communal buildings, and books to use in communal schools. Most groups do not print or mint money --family, United Nations, city, state, Girl Scouts, bridge club. They do sometimes collect from members the goods and services that the group needs. In doing so, they collect in-kind taxes.

We can see the July 4th holiday as a tax in kind, since employers must put up the time-costs of a paid holiday. The government of the United States of America wants most employees to have one day off from work to celebrate the anniversary of the nation's independence. If we see the employers as giving those days to the government which then awards them to the workers, we can say the employers have paid a tax in kind.

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV :: 62. Tax in Kind ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

63. Whose Time, Whose Money?

Whose Time, Whose Money?

Bob Komives
::

In kind, we give to our government
......some of our goods and our services,
or, in kind, we may give to our government
......strange money,
......once minted,
......once spent
......by a foreign government.

||

The governing bodies of groups that do not mint and caretake money may tax their members in money. Even a national government can tax citizens in a foreign currency. Money minted by another government is a good, a mobile and flexible good that can be collected and converted into food, fuel, and books. The collected money is legitimate budgetary income. It is a tax in kind.

My insistence on the difference between minting and non-minting governments may seem puzzling, but it is the same difference that is obvious to a farmer who needs 120 hours of work to harvest his wheat. He knows that he can work twelve hours a day for several days to get the crop in. (He'll need another twelve hours each day to eat, sleep and attend to other important matters.) He can tax himself ten days of work to harvest the wheat. Unfortunately, this year, he needs to harvest the crop in one day because he expects a big storm. He knows that no matter how he uses his time, he cannot tax himself 120 hours in one day. He produces his own time, just as national governments produce their own money.

No amount
of self-taxation of self-production
creates more resources
to do the task at hand.

||

The farmer asks nine neighbors who have already harvested to give him tomorrow twelve hours of work each. Their organized 120 hours of effort bring enough time to the task to harvest the crop in one twenty-four-hour day. The farmer gets a tax in kind from nine neighbors. He taxes them in their time, not his time, and multiplies his resources for harvesting his crop.

The farmer knows he cannot get his own time back, call it income, and spend it again --knowing how foolish he would look if he pretended to do so. Governments that mint and caretake money must learn that they cannot get their own money back, call it income, and spend it again --no matter how responsible they look when they pretend to do so.

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV
:: 63. Whose Time, Whose Money? ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

64. Tax In Price

Tax In Price
Bob Komives
::

Artificially,
our government raises

(or lowers)

the price of a good or a service
so that
we change our patterns of purchase,
so that

(for communal benefit)

we change our private investment.

||

The U.S. American government does not forbid that we work on the 4th of July, but rather requires that employers pay extra to those of us who do work. That is a tax in price. We raise the cost of labor on the holiday to induce employers to give us the day off. When our government put a tariff on certain electronic equipment imported from Japan, it raised the cost to consumers in the USA. When it twisted the collective arm of Japanese auto makers to put a quota on exports to the USA Japanese manufacturers began to export to us more expensive cars. The increased prices and changes in products induced some of us to buy other products --perhaps made in the USA by a Japanese firm, perhaps made by a USA company in Mexico. Some of us may have changed to the more expensive, more luxurious Japanese autos, because, though it was more luxury than we needed, we were willing to sacrifice in some other part of our budget in order to have Japanese quality in our transportation. With or without intent, our government induced these changes in the way we play our roles as consumers. The tariff brought money into the USA treasury, while the quota gave higher per-item profit to the Japanese companies. Both tariff and quota induced a reallocation of our resources in U.S. America. Both were price taxation because changes in price and product-for-price caused the reallocation. These reallocated resources were the income (and loss) from the tax in price. Any money that came into the USA treasury was incidental by-product, not income.

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

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

65. Monetary Recall: An illegitimate Tax

Monetary Recall: An illegitimate Tax
Bob Komives
::

Our Government tries, in vain,
to finance its actions
by recalling from us
--taking back from us--
a portion of the money
that it minted for us
and spent among us.

||

One government action is conspicuous for its absence from my list of legitimate taxes. The governmental action that we most often call "taxation" is an illegitimate (or pseudo) tax. I call it, monetary recall.

In ignorance, national governments recall money from their citizens, hoping to reduce the market wealth controlled by taxpayers and pass that investment power to the government. Since this pseudo taxation does not tax, it is no wonder that these national governments get confused when they try to balance their budgets. They try to balance real investments with pseudo taxes --fantasy taxes. A minting government can tax national resources by minting and spending money, but cannot get that money back --even though it believes and tries, and tries and tries again.

While few of us will kid ourselves into believing that the day we spend today is actually the day we spent yesterday, national governments continue to believe that the dollar that they recall today to spend tomorrow is the same one they issued yesterday. It is not because --in anticipation of the recall-- wages and prices have risen to null the effect of the recall. Monetary recall generates no income for the minting government, rather it inflates the currency, decreasing its value.

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV
:: 65. Monetary Recall: An illegitimate Tax ::
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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66. Recall Seems To Tax, But Fails.

Recall seems to Tax, But Fails
Bob Komives
::

To an individual taxpayer, monetary recall seems to work. She can trade every dollar in her hands for a small percentage of the wealth traded in the marketplace. If the federal government recalls dollars from her --taking money out of her hands-- she can now trade for less of that wealth. Each dollar she gives to the national government seems to reduce the wealth that she has to make purchases or investments for herself.

To the government official that receives her dollar the tax seems to work. He sees the recalled dollar as revenue. He sees the dollar that comes in as an opportunity for government to buy from the marketplace. The perceptions of both taxpayer and government official are understandable, but erroneous.

First, a superficial problem: taxation has costs. To debate, to legislate, and to receive, as well as to calculate, to send, and to avoid taxes we use resources. The recalled dollar buys less of what the government wants than it does of what the individual wants because part of the dollar erodes away during recall. In what amounts to circular bucket pouring, a little drips out with each pour.

Second, the fundamental problem: within a small margin of error, taxpayers know how much they will have to pay in taxes. They discount every dollar they receive, anticipating the return of part of each dollar to the government.

Into marketplace
goes the taxpayer
and with taxpayer
begins to bargain.
"After taxes I have nothing," he says.
"After taxes I will have nothing" she says.
After exaggeration and inflation,
taxpayer and taxpayer make a deal.

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Monetary recall is almost never a secret. It may be the biggest topic of conversation after weather and sports. People are smart enough to discount the face value of the money they receive to allow for the amount that they will have to return through the recall. Thus, it takes more discounted money to buy a refrigerator than it would take undiscounted money. Spread through the savings, lending, and investment system, the net effect of discounting is to force the economy to mint more money --to force inflation.

When a seller of chickens believes he should get the equivalent of one 75-cent cement block for each chicken, he will intuitively try to charge $1.00 if he knows 25 cents will eventually go for taxes. In turn, the cement block has a price of 75 cents because the cement block maker must charge that to get the fifty-six cents she wants from the sale of the block. The rest she sets aside in her mind for taxes.

This price-raising system is not perfect. Chicken sellers and block makers cannot raise prices without fear of loss of sales to competitors. However, the entire marketplace operates with discounted money. The value of a dollar is the value we give it. If together we discount its value in anticipation of monetary recall, together we push inflation. Buyers and sellers exchange goods and services for money in the marketplace with full knowledge that they have to pay taxes. All of the money collected by the Internal Revenue Service has already been discounted in value (prices have inflated). The value of each dollar reflects the net value that people believe they can receive from it. It incorporates a discount that reflects the average tax burden experienced by the population. If that average burden is about 25% a suit that would cost about $75 without recall taxes could cost about $100 with them.

When the price of oil went up rapidly in the early 1970's, other prices in the world's marketplaces tended to follow because petroleum users successfully raised their prices. Monetary recall has the same effect.

Income "taxes" raise the cost of my labor.
I raise the price of my labor because
I discount the value of my income
in anticipation of the taxes
I know I must pay.
When I discount the value of dollars I receive,
I, in effect, demand that more dollars be printed.
I have become inflationary pressure.

.....We thought we had severely taxed ourselves
.....when, automatically,
.....we sent back some of our national currency.
Yet, we only taxed sincerity.
.....We thought we had paid
.....for what our government spent.
Yet, we only paid for what we did not earn.
For this is the rule:
.....Our automatic tax,
.....our national income tax,
.....puts more money into circulation,
.....and then tries as best it can to take it back.
If you doubt this rule,
please search for its exception.
Search for:
.....the person,
.....the employer,
.....the employee,
.....the customer,
.....the idiot
.....who bargains and shops
.....ignoring that he knows
.....some of what comes
..........in to him
..........goes right back
.....out to his government.

||

:: Bob Komives, Fort Collins © 2006 :: Plum Local IV
:: 66. Recall Seems To Tax, But Fails ::
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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