CtTaxed.com

It Is The Economy, Stupid

While the Dem candidates are debating 3 AM calls, Americans are feeling less and less comfortable in their own economic skins.

It would be wise for the candidates to focus on “It’s The Economy, Stupid”, people’s comfort level in their economic stratus can explode and within weeks become the dominate issue. I suspect this election cycle will be no different.

Taxes, home heating oil and gas prices are hitting the wallets of Americans hard. In hard economic times families cut back and the difference between in-elastic and elastic spending is once again evident, even in households with no economics training (like our State House and Senate).

Driving and heating your house are in-elastic expenditures to a degree, in other words we can adjust our spending by conserving, consolidating trips and turning the thermostat down a couple of degrees. But there are limits to how low we can go. We must have oil and gas or we cease to function. Oil and gas are necessary spending.

Government spending knows no limits, or restrictions . It increases regardless of the economy or how much oil or gas increases. Government spending is also in-elastic. It bears almost no relation to the supply of our money, the Government demands and we pay up, Government taxes are necessary spending.

Government spending is backed up with men with guns. Don’t pay your taxes and the worlds best collection agency will come knocking on your door. Pretty darn in-elastic.

We Americans are feeling stretched between our government’s appetite for our money and our expenditures on life’s requirements such as food and gas. Especially now that our Government’s policies are driving up the cost of food (re: ethanol) and gas (re:ethanol and the deliberate policy of driving down the dollars value).

The biggest beneficiary’s of the increasing gas price is Government. Both federal and state, the Government’s take is a percentage, as the price of gas goes up, the windfall profits to the Government goes up. Making the Congressional grilling of the Oil Industry executives all the more laughable. The biggest beneficiary’s were the “outraged” ones sitting high up. We are getting double and triple squeezed. In Connecticut over 66 cents per gallon is tax, in a typical 15 gallon tank that is 10.00$ in gas tax. I fill up about once a week, this adds an additional ~$1040 a year in tax between my two cars. If you agree gas is about ~1$ too high, between my two cars I am seeing an additional $1,560 in gas costs for a total of $2,600 in after tax dollars. With a 25% tax rate that is $3,500 in paycheck dollars (pre-income tax dollars).

This is some tough economic medicine. But American’s don’t believe the Government is taking some of it’s own medicine.

While property taxes may be based in theory on our houses’ value, the decrease in almost all American’s homes values is not being met with a corresponding decease in their property taxes or in a decrease in the size or spending of Government.

Government does not respond to supply. It’s in-elastic you see.

The cost of Government should be based on the people’s wealth, if the wealth of the people decreases the cost of Government should also decrease.

I suggest that Government spending including debt service be limited to percent of the people’s wealth.

No comments yet

Leave a Reply