Subsidies to owners = taxes on Renters-Mankiw

Almost four centuries ago, the philosopher Thomas Hobbes suggested that taxes should be based on consumption, not income. Income measures a person’s contribution of labor and capital to society’s production of goods and services. Consumption measures the quantity of those goods and services he gets to enjoy. Hobbes reasoned that because consumption better reflects the benefits a person receives as a member of society, it is the proper basis of taxation.

Much modern economic theory confirms that conclusion

A good rule of thumb is that when you tax something, you get less of it. That means that taxes on hard work, saving and entrepreneurial risk-taking impede these fundamental drivers of economic growth. The alternative is to tax those things we would like to get less of.

Good quote Brooks2, so it's more than natural that if want to discourage using cars and promote mass transit, the best way is to tax gasoline, but it's always more politically popular to offer a subsidy to the idea you wish to promote than to tax the activity you wish to discourage.

Either buy something, move to a more affordable city, or stop whining already.

> That means that taxes on hard work, saving and entrepreneurial risk-taking impede these fundamental drivers of economic growth. The alternative is to tax those things we would like to get less of.

The other side of the coin is that voters like to subsidize leisure, which is a normal good. If they are ok with taxing wage-earning instead of assets of inelastic supply (land) and consumption, they are telling you that you should "take it easy and smell the roses". Not a bad incentive imho. :-)

"Hobbes reasoned that because consumption better reflects the benefits a person receives as a member of society, it is the proper basis of taxation."

Did Hobbes elaborate on what those 'benefits' are? If so, did he include the security (against foreign powers), social stability, and economic opportunities that our high priced military and other federal spendings provide? Does Hobbes think it should cost the same to insure a billion dollar account vs. a thousand dollar account?

Consumption tax does have its place. The cigarette tax works pretty well.

Before the introduction of the nefast "income tax", taxation relied on consumption taxes of those items you want to minimize consumption of (alcohol for example) and LAND OWNERSHIP. Voters were told that the "income tax" will only affect those that earned millions (the top 1% of the population) and tax rates were tiny. The other component of "wage taxation", FICA rates, also followed a very similar trajectory. Voters were promised a lot for almost nothing, but as we all know FICA rates grew from 1% to 15% (and are assumed to go up to 30% to accomodate the retirement of baby boomers).

Check out how much land-owners are paying nowadays: they won! it's pennies, pretty much nothing. And workers lost. As voters realize of this you'd think Americans will appreciate their leisure time more and shift effort towards "having a life", not work. Let's hope it happens, it'll increase their quality of life. At the very least the "Two-Income Trap" effect will be noticed and families will revert to being 1-wage only and the other adult should focus on household production and net worth-building activities (like running her/his own business). Double-wage earning is not efficient anymore.

"Check out how much land-owners are paying nowadays: they won! it's pennies, pretty much nothing."

Get back to us when you're an actual "land owner".

'Consumption tax does have its place. The cigarette tax works pretty well.'

Screw the nanny state.
I don't need big government dictating my actions.
I am willing to relinquish my entitlments infavor of personal freedom and privacy.
"Those who are willing to give up a little freedom for a little security, wind up with neither freedom, nor security".

That works to a point, now have the government deny medicaire or medicaid to the junkie who contract aids, the smoker who came down with cancer, the diabetic who insisted on eating candy who now needs a prosthesis, or the alcoholic who needs a new liver. It's a tough policy to enforce.

Who said you can't smoke in the privacy of your own home falcogold1?

>Check out how much land-owners are paying nowadays: they won! it's pennies, pretty much nothing. And workers lost. As voters realize of this you'd think Americans will appreciate their leisure time more and shift effort towards "having a life", not work. Let's hope it happens, it'll increase their quality of life. At the very least the "Two-Income Trap" effect will be noticed and families will revert to being 1-wage only and the other adult should focus on household production and net worth-building activities (like running her/his own business). Double-wage earning is not efficient anymore.

Would this be similar to any other country you are aware of? If yes, which country(ies)? And how are they doing?

Riversider, I would also support higher tax for alcohol and junk food.

Wines a big industry, in NY California, Oregon employs countless people, why destroy it? And sugar isn't bad, if you stick to a teaspoon or two with a daily coffee. But on some level, Sunday I do agree, someone who smokes and weights 300 pounds should pay higher insurance rates.

Riversider, I didn't higher tax for pure sugar. Yes, "junk food" has to be defined, but let's assume some common sense here.

Of course it will slowly kill some jobs. More healthly people will kill healthcare and pharmaceutical jobs too. I can live with that. Other jobs will be created to embrace these healthier and more active people.

Sunday, there's a famous show the 2000 year old man where Mel Brooks describes his secret for living a long life, it was quite austere, except he included in his menu one corned beef sandwich.. To which Carl Reiner asks, why a corned beef sandwich? Mel's answer, "man needs something to live for"

Riversider, then he won't mind paying a higher price for it. Again, no said anything about banning it.

Even if he minds, I don't care. He can convince the gov to tax something I like.

I'm defending smoking.
I object to government using their powers, such as taxation, to effect my personal behavior.
I object to laws that effect personal choice wrt to personal freedom/privacy (i.e. falco is pro-choice).
I object to entitlements.
I am open to any plan that cares for the health/welfare of the needy.
THE VERY NEEDY, not every Tom, Dick, and Harry waving a birth certificate dated befor 1947.
I don't want to make it easy to become a ward of the state.
I want to live in a country where every able bodied person takes full responsibility for the health and well being. Those that fail at this become cautionary tales for those that follow. Social programs that reward behavior that is burdensome to the state are counter productive.
How far are you willing to go?
Freakenomics suggests that the 1973 Roe v. Wade decision is, in part, responsible for huge crime reduction that we saw in the 90's. Does this suggest that we pass laws that demand abortions of all teenage unwed mothers?
How about a little Sweden style Eugenics?
Between 1934 and 1976, when the Sterilisation Act was finally repealed, 62,000 people, 90 percent of them women, were sterilised. 15-year-old teenagers were sterilised for "crimes" such as going to dance halls. One woman was sterilised in 1960 for being in a motorcycle gang. Orphans were sterilised as a condition of their release from children's homes. Others were pinpointed on the basis of local neighbourhood gossip and personal grudges. Some were targeted because of their "low intelligence", being of mixed race, being gypsies, or for physical defects.
The results is a significant reduction in the behaviors that the society was looking to eliminate. So, kinda of scary that it works.
Still interested in a nanny state?

My own view is to encourage healthy behavior but not to ban unhealthy behavior. Give citizens the tools to do the right thing, but let the choice be theirs. What's next the government installs web-cams in our kitchens?

Consider the camera systems that have been installed right here in the city...
During a period of unpresidented drop in crime.
Get this, the crime went down THEN the cameras went up...in responce to nothing except the availability of the technology.
Hey, that cool smart phone in your hand...think your location is unknown?
Think that camera and mich can't be turned on remotly without your knowlege?
You have already taken your OWN time and energy to map out your entire social network on facebook and shared this with your government.
Can you only imagine how easy this technology would have made the NAZI mass exterminations?
Every electronic transaction, conversation, e-mail, search etc. We are essentially an open book to our government. Soon they will control our medical health records. All this info culled together to produce profiles that some day might make ordinary experiences dangerous.
They know from your last blood test that you sugar is boarderline, your gym card hasn't been scaned is 10 months, you're over at Donut Plant for a treat but as wave your 'citicard' over the pay scanner you're tackled from behind by the health policy, cuffed, muzzeled and dragged off to some prediabetic reeducation camp. It won't be called a concentration camp, it will be a reeducation camp with missleading names like Camp Splenda.....Mao would be so proud.

If done cost effectively, I support a camera at all public areas. I have nothing to hide.

Nazi [Hitler] already entered ther conversation? falcogold1, you apparently like being just another statistic more than you think. Nazi tools? And I thought Facebook and Twitter were weapons against governments...

Riversider: "My own view is to encourage healthy behavior but not to ban unhealthy behavior."

Like relatively lower tax for products/services associated with healthier life style?

Like relatively lower tax for products/services associated with healthier life style?
-----------
Actually not, like nutrition labels on foods and education

Riversider, I was just trying to say that higher tax on unhealthy product is the same as lower tax on healthy products.

Sunday,
Watch the movie Brazil and ask yourself, will "I have nothing to hide" save you from a typo.
Read the book 1984....
Those who do not learn from history are condemned to repeat it.
The power has shifted to the multimnation cooperations who exist outside the confines of US law.
It is they that control the flow
It is they that control the spice
That simple....
Perfect for a simpleton

I would describe the current situation as more of a Corporatocracy. Big business and government are more aligned now than ever.

Look at your own town.
20 motivated people pooled their efforts and knocked down the WTC.
We panicked, signed away truck loads of personal freedoms on the off chance the government, that can't even balance a check book, could some how keep us safe.
I'm still taking off mt shoes at airports...like that's gonna keep me safe.

Falcongold, Is Ron Paul Tuttle?

falcogold1, genius, go find a place like Arrakis and live like a Fremen. No one will bother you.

I came into this game for the action, the excitement. Go anywhere, travel light, get in, get out, wherever there's trouble, a man alone. Now they got the whole country sectioned off, you can't make a move without a form.

>Now they got the whole country sectioned off, you can't make a move without a form.

Not entirely true if you are willing to drive. And so ... subsidized gasoline, the government loves us. Especially in New Jersey.

Even the Catholic Church of the Middle Ages was tolerant by modern standards. Part of the reason for this was that in the past no government had the power to keep its citizens under constant surveillance. The invention of print, however, made it easier to manipulate public opinion, and the film and the radio carried the process further. With the development of television, and the technical advance which made it possible to receive and transmit simultaneously on the same instrument, private life came to an end.

"The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power. Not wealth or luxury or long life or happiness: only power, pure power. What pure power means you will understand presently. We are different from all the oligarchies of the past, in that we know what we are doing. All the others, even those who resembled ourselves, were cowards and hypocrites. The German Nazis and the Russian Communists came very close to us in their methods, but they never had the courage to recognize their own motives. They pretended, perhaps they even believed, that they had seized power unwillingly and for a limited time, and that just round the corner there lay a paradise where human beings would be free and equal. We are not like that. We know that no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power."

so i guess we don't need to read "1984" if we haven't already done so.

Zackly

"Even the Catholic Church of the Middle Ages was tolerant by modern standards. "

Ummmm...of serfdom & slavery (not only did nobles and royals own have them, but the Church ITSELF often had them), mass witch burning, periods of large-scale killing of non-Catholics including but not limited to Cathars, Muslims, Jews, and other "heretics"...not to mention the various wars the papacy directly fought with its own armies (the Pope was just another Italian prince until Italian unification.)

In what sense was the Catholic Church "tolerant"?

GDP is GDP. The tax revenue should be the same no matter it is taxed on the production side or consuming side, roughly. However, for those who were taxed on the production side, human nature will push the tax payer to work harder to make up for the tax payment loss. So that they would have more money to spend. This will enhance consumerism economy like ours. If the government's main tax revenue is coming from sales tax, then the tax payer will try to save tax by spending less. That will create a cycle of economic contraction.

"Can you only imagine how easy this technology would have made the NAZI mass exterminations?"

If only the citizenry held onto their guns ...

***

"Every electronic transaction, conversation, e-mail, search etc. We are essentially an open book to our government. Soon they will control our medical health records. All this info culled together to produce profiles that some day might make ordinary experiences dangerous.
They know from your last blood test that you sugar is boarderline, your gym card hasn't been scaned is 10 months, you're over at Donut Plant for a treat but as wave your 'citicard' over the pay scanner you're tackled from behind by the health policy, cuffed, muzzeled and dragged off to some prediabetic reeducation camp. It won't be called a concentration camp, it will be a reeducation camp with missleading names like Camp Splenda.....Mao would be so proud."

I'm totally with you on this, falco.

"If done cost effectively, I support a camera at all public areas. I have nothing to hide."

Until you do.

Until you're framed for a crime you didn't commit. Or you just happened to be at the wrong place at the wrong time. And now you're a wanted man. Your picture is everywhere. Cameras are everywhere. Your iPhone is constantly betraying your location, so you're forced to chuck it.

Now you're on the run. What are you going to do for cash? Forget your credit cards -- they've been frozen. Ditto your ATM card. Write a check? LOLOLOL!!!! Oh we got rid of that silly old tradition years ago!

Must leave the city. Must leave the city. You jump into your car and ... wait ... what are those flashing lights? AYIEEE! Your car has betrayed you, too, with its blasted built-in GPS! You step on the gas, try to lose them. Oh no! Nothing's happening! The car is stalling -- on purpose! Your OnStar emergency service has also betrayed you (didn't know they could remotely shut your car off, did you? Surprise! It's for your own safety, after all).

It doesn't take much these days to end up on the wrong side of the law. And in this Brave New World of technology, God help us all.

NYCMatt, how would having cameras in all public areas increase your chances of being framed for a crime you didn't commit? I would imagine it would be easier to prove your innocence. It would definitely decrease your chance of being a victim of a crime. Besides, a typical person probably have a mulitple order of magnitude greater chance of being a victim of a crime than ever being framed for a crime.

"NYCMatt, how would having cameras in all public areas increase your chances of being framed for a crime you didn't commit? I would imagine it would be easier to prove your innocence. It would definitely decrease your chance of being a victim of a crime. Besides, a typical person probably have a mulitple order of magnitude greater chance of being a victim of a crime than ever being framed for a crime."

Not everything is caught on camera. But YOU always will be.

Cameras aren't quite 1984 yet. Though relatively easy for A to B crimes like running red lights, not for actions that need any minor amount of subjective observation which requires human eyes, and not all the people in India and China can monitor every CCTV in NY alone is enough to catch MAtt smoking a joint in Gramercy Park.

And besides, Sandra Bullock's "The Net" is so 90s.

The mortgage deduction is now built into prices. New buyers don't really get the benefits... we are subsidizing those who owned before the runup based on it, many of whom sold already.

What stands to happen is that those who bought at the inflated prices end up having to pay it back if it goes away (through lower prices) without ever having gotten it in the first place.

Sorry the beneficiary of the home mortgage is not really the buyer but the seller.

Wasn't that what I just said?

You think that all this is to fight crime?
Are you so sure that social conditions will always be so comfortable?
The Metamorphosis is a novella by Franz Kafka, first published in 1915.
The story begins with a traveling salesman, waking to find himself transformed into a monstrous insect-like creature.
The key here is that he is writing prior to 1915 yet describing with a fair amount of metaphorical accuracy what was to come 20 plus years later. When races of humans were declared non-human basiclly over night.
As far as hanging on to your guns as a matter of personal safety...how did that work out for David Koresh down in Waco. What was his crime again? not answering the door fast enough or in a manner that would satisfy the ATF?
Social conditions can change on a dime. All it takes is some bad weather add in a bad economy, mix it with American educated in the public system who have never had the experience of clear critical thinking and you have a recipe for just about anything you could iomagine...bad.
The best defence in to defend our privacy and work to reduce big government and place personal freedom above any false sense of security.
My message to my government: DON'T TREAD ON ME

falco, I'm sure you caught the story about Rand Paul today.

"A government big enough to give you everything you want, is strong enough to take everything you have"

falco, also the Supreme Court decision today on the GPS tracking

My only shock is that Scalia wrote the decision.

“The police state in this country is growing out of control. One of the ultimate embodiments of this is the TSA that gropes and grabs our children, our seniors and our loved ones and neighbors with disabilities. The TSA does all of this while doing nothing to keep us safe,”

To bad for all of us. Paul has some of the right ideas mixed with with some of the craziest crap ever.

The machine will not be modified by the will of the masses. The machine is altered to do the bidding of the multinationals cooperations. It is they who are now writing the rules for all international business and trade going forward. It's the IMF, the World Bank ect.
Why would we let them write their own rules?
'cause someone is jingling keys and have our attention.
It will be a bitter pill mixed in with the applesauce if we don't wake from our i-Pad induced catatonic state.
Look.....angry birds

To bad for all of us. Paul has some of the right ideas mixed with with some of the craziest crap ever---

I don't see anything too crazy about his ideas? He would make a great Predident.

Thank you facto.

Ooooh look -- a Kardashian pregnancy!

Just pay no attention to that multinational agreement Obama is about to sign. Boring. What do you think Kim will name the baby????