www.CostaRicaTicas.com

Prolijo all this is moot because it will never happen, or if it did, as you allude, it would be a 'flat' tax constructed to be more flat for some than others.

I also believe that your world view clouds to some extent your argument. Of course that is true of all of us, but many of your criticism that are true of a flat tax are equally true of our present tax code. I certainly do not disagree that the people giving the large campaign contributions will have more influence on the tax code, but is that any different under the present code that has been influenced for years by those same individuals?

I am not sure at all though how a flat tax would in any way spur a larger underground economy than the system we have. Comparing tax avoidance in one country to what would happen in another country is problematical at best since so many other factors are involved. I am sure realtors and mortgage holders would want a ‘flat’ tax that would be ‘flat’ in all areas except those pertaining to them, but isn’t that true of everyone when it comes to taxes?

My world view differs from yours when it comes to your assertion that we want to encourage certain investments. Over the last few years we encouraged home ownership for people that had not saved or had yet reached income levels that made home ownership practical without subprime interest only mortgages and no down payments. I question political ‘encouragement’ on every level in our economy because too often that encouragement is for political reasons. I also believe that the combined intellect of the marketplace will always allocate economic resources in a more efficient manner than even the smartest elected official or government economist.

In France VAT is 22%. That is an onerous enough tax level and, as you point out, is a regressive tax. But not only do the French pay a 22% VAT they also have income taxes. A national sales tax in this country would be beneficial in that it would not tax savings, deferred gratification and investment (all the same thing according to economic theory), but I am sure that it would not be too many years before an income tax, however small, was added to the mix. I fail to see how a flat tax though would be anymore incredibly regressive than VAT or a national sales tax.

I don’t see the problem as Republican versus Democrat or ‘fat cat’ versus ‘working man’. For me the problem is one of a political system of favors through our tax code and one of lost productivity. All those CPA’s, tax attorneys, investment counselors, tax shelter specialist and etc as well as the poor sod trying to honestly figure out what his tax liability is would have the time to do things much more productive.
Too often we use terms like ‘simplistic appeal’ to try and denigrate those that have different viewpoints and make class assertions that something would be a huge tax increase on ‘working Americans’ (as if entrepreneurs and employers were not) and a huge tax cut for the wealthy when in fact we don’t know that or realize that the truly wealthy in America through tax attorneys, tax shelters, municipal bonds and other instruments often pay very little in taxes compared to what they would pay in a flat tax system.

Not sure economic statistics support the premise that ‘once you have made your first million it becomes much much easier to make your second and third and so forth’ either. Many of last year’s millionaires are often bankrupt and starting over again and in fact, until money becomes ‘old money’ protected by CRT and other such instruments it does not remain static to the degree that some would like to believe.
Comparative advantage is such a difficult concept for the non economist to grasp and it becomes impossible to grasp when it’s your job that is at comparative disadvantage and I will agree with Keynes that, “In the long-run we are all dead”. But if it comes to using billable hours at one’s profession versus trying to fix their own lawnmower’s small engine simple economics comes to the fore and we take the damn lawnmower in to the small engine repair shop and work at what we are most efficient and productive at. Suddenly perhaps we do understand comparative advantage after all.

Thanks to unfettered capitalism we can now afford not to have unfettered capitalism. Think about that for a minute. There is a green parrot nesting in the electrical system of the Bronx that was not there until years ago someone brought it up from Central America. It is causing house fires and electrical outages. Some people want the bird exterminated others want it declared an endangered species. Forty years ago that would have been out of the question and perhaps after another really severe economic downturn it will be again as we begin to see ourselves as an ‘endangered species.

The mortgage melt down did not start in the US. It started in the UK and the Blair government at various times propped up the market to avoid what is now happening. The real estate bubble was much more pronounced and lasted much longer in the UK than in this country. Collateralized Mortgage Obligations were a US invention and one of the only ways that banks could meet the requirements foisted upon them by our politicians (most notably Chris Dodd and Barney Frank) to make loans to people that were high credit risks without charging high interest rates to offset those risks. Instead the risks were collateralized and passed on to the tax payers by government agencies that gave large campaign contributions to their overseers (did I mention Chris and Barney?).

Are we smug here in the US at how we do things? I’m not sure. After living in Sweden (perhaps the smuggest country of all that I have lived in), Germany, The Netherlands, the UK (pretty damn smug), France (smug enough) and Italy (not smug at all just a country that wants to have fun) I don’t think we have a corner on smugness and when I think back on all the people in this world that want to immigrate to the US we must be doing something right.

Lastly, the labor theory of value was rejected long ago. Productivity is not typically a bottom up input. Increases in capital increase productivity over time or the capital simply disappears overtime. There has never been one single historical example where eliminating those that invest and employ capital has given rise in the standard of living.

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The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.

Gentlemen,

Despite the official policy prohibiting political discourse on this Forum, I am very gratified that Admin 1 has seen fit to permit it to continue here in this thread.

It is and has always been my belief that gentlemen should be able to intelligently discuss *anything*, be it politics, sex, religion, necrophilia...whatever. I I disagree with a statement made by Tomas (Admin) that political discussions are by their nature devisive and contrary to the intent and spirit of CRT; I contend that the membership here is wholly capable of conducting intelligent conversation without needless rancor or cultivation of bad feelings. .

I applaud the absolutely brilliant discussion here so far, whether it be about the form and purpose of foreign aid, the economy, rates/methods of taxation, the incoming administration, or political theories.

God bless you good fellows...even the atheists. .

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Pura Vulva! Wandering through the dark, I am El Ciego.

Well said El C... I've always thought that intelligent people can discuss whatever topic... Would be a helluva boring life if we all had the same outlook and opinions.

El Ciego please forgive me, but I cannot help myself...necrophilia is a dead subject to me.

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The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.

TAZ -- I went to the PRC around 1992. It was still pretty closed but not as bad as it had been just five years before. One of the stops we made was at a souvenir shop for western tourists.

Ironically, it was housed in the “temple of labor” and shrine to communism which had been a present from the Soviet Russians to the PRC in the early 50s. It looked peculiarly like a modern version of the Mormon Temple in Salt Lake City (I hope no on will change this thread from politics to religion - that was NOT the intent of the comparison).

A top the center spire was a Red Star. At the street level, the foundation of the building so to speak, was a large (approx 4 x 8 feet) back lit sign which blazed the logo of MasterCard to anyone who passed by.

I took a photo which captured the contrasts: The Master Card sign looking skyward toward the antithesis – the red star of Communism.

And, anyone who was priviledged to enter the Kremlin prior to the fall of Communism in Russia would have found a branch of Chase Bank.

Okay, so we're a little bit socialist in the U.S., and the Communist countries have always been a little bit capitalist.

My biggest fear has less to do with the sharing of wealth than by the strings attached. Anytime someone tries to run my life, I resent it. No, you can't smoke in bars. Yes, you must wear safety equipment. Yes, we'll take 40% of your earnings as taxes, thus ensuring that you will remain a wage slave until after you're dead. Etc.

"I went down to Virginia, seeking shelter from the storm.
Caught up in the fable I watched the tower grow.
Five-year plans and New Deals, wrapped in golden chains...
And I wonder, still I wonder
Who'll stop the reign?" Er, "rain."

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Pura Vulva! Wandering through the dark, I am El Ciego.

El Ciego I have not been inside the Kremlin walls since 1966 (yeah I'm a geezer). Did they really have a Chase Bank inside the walls? Or was it just outside on the square? If inside that is as incredible as the Master Card logo on top of the palace of culture. What a strange and crazy world we live in.

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The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.

El Ciego, you have stuck very well upon the point I was trying to make. It is the issue of totalitarianism that frightens all of us. On the other issue, I had no idea there was a branch of Chase Bank inside the Kremlin. It probably should not be that much of a surprise since Oxy Oil and other American companies used to do a lot of business there even before the fall of the Soviet.

Dr. Armand Hammer, the director of Occidental Oil, was very close to some of the CCCP's most infamous and in fact a good case has been made that he was a spy for them.

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The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.

This is very interesting! What the hell took you guys to the Kremlin? I would loved to have seen that back in the day...

I was a student of economics at the International Graduate School of the University of Stockholm. Very left wing in those days, strongly against the war in Vietnam and living on a very small student stipend. I got a chance to go with a group of likeminded students (almost all Swedish) on a Sputnik tour. Sputnik tours were much cheaper than Intourist and in fact were subsidized by the communist party to try and win over future leaders. My time in the Soviet Union was both interesting and frightening. My senior year of undergraduate school I worked in the air lock (final assembly) on the Apollo Project. I had a job a trained monkey could do, but one that put me inside the command modules of spacecraft that went to the moon and required a several different levels of security clearance to be in the plant (North American Rockwell in Downey, CA), in the building where the air lock was, in the air lock and on the stacks (I had clearance right up to stack level). When requesting a visa for entry to the Soviet Union I was asked about my past employment and I was stupid enough to think I would be denied entry if I listed that employment (I thought the US government had something to do with approval of the visa, after all I was only a stupid K*D in my very early 20's) and fortunately I did not list that job. Just before the trip I had thrown away a pair of Corfam shoes. Corfam in those days was the 'material of the future' supposedly. The stuff was awful. Those shoes did not breathe and gave me blisters. Once I wore holes in both soles to the point that putting cardboard in them would no longer do the job I threw them in the garbage and they were covered with coffee grinds and bacon grease when my roommate asked if he could have them. At the time I thought he was crazy until he sold them to a Russian on the black market for 50 rubles and at that time it took $1.11 to buy one ruble and one ruble would buy you champagne and caviar. So I started collecting used western clothing for sale on the black market in the Soviet Union; mostly used Levis because they wanted them the most. Got blind drunk one night in Leningrad with two black marketeers and four other friends and while sitting in a taxi cab with them near the church at the end of the big canal there a policeman approached us and we split into two groups. He followed my group and then asked for a bribe. At least that is what my Swedish friend that spoke some Russian thought. We spoke Swedish to each other and not English and for some reason the cop thought I was Russian and not American (you could not carry your passport in those days and had to turn it into your hotel when you checked in) and when I would not give him the bribe he arrested me. I spent the night in jail until early the next morning when our guide, whom fortunately had a crush on me, came down to get me out and show them my passport. For the next two or three days they followed me everywhere and I was approached in a group of four guys I hung with by a waiter who, after ascertaining what my name was wanted to trade money with me. He offered me 12 to 1, but I did not bite. By that time I was totally paranoid that they somehow knew about my work on the Apollo Project and I was going to be jailed and never get out of there. I'm sure they didn't because years later I would learn just how stupid intelligent agencies are, but at the time I was quite scared. A few weeks later two drunk Canadians tried to steal a bronze bear in front of their hotel and they got sent to Siberia so I guess I was lucky. One final thought: I have not been back to the Soviet Union or Russian since then, but the women were really not very attractive then so it just goes to show that the capitalist system (and I was trying to bring it to them) improves the looks of communist women, although I have to admit the women were better looking in other Warsaw Pact countries I spent time in after that.

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The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.