Tax Sugar!

Some U.S researchers are calling Sugar a toxic substance that needs to be taxed. Now I am all for taxing sugar  as well as soda drinks and then putting that money either at reducing the deficit or putting into Health Care. I don't like saying that sugar is toxic. Everything CAN BE TOXIC in a certain concentration. Paracelsus stated "the dose makes the poison." So all substances can be toxic if you have too much, but we tax substances like Alcohol and tobacco, because the government has to then provide the money for the health problems they have later . I think that since sugar is linked to obesity and a lot of money is put into providing health care for people who are obese it would only make sense to tax this substance to pay for the amount of money is needed to provide health care for them. Rather then continuing to allow the straining of our health care system .Now I don't think that people should just be taxed without being given an alternative. Like a carbon tax taxing companies we should also provide clean renewable energy for them to shift to. More local farming and and reduce the amount of sugar in food are alternatives our government must look into. We need a food revolution to make healthy food the economical choice for families. We need to always try and make good healthy food less expensive so that if people who want to buy healthy food can always.

My friends don't know anything about economics!

I have heard many crazy things, said seriously, by my friends. Most recently and scarily was the suggestion that, to curb inflation's primary driver (oil), we add a tax to it. Allow me to explain why that is wrong on so many levels. Tax, but pay back The idea was that a tax would be imposed on fuel, but it would go towards compensating people for the higher price. That is like mugging someone at a gas station for 20$, but giving them a 19$ gas card (some gets lost to taxation and bureaucracy). It doesn't matter that the mugger gives most of it back: they still stole from you. But even assuming that there is no inefficiency (and this tax is not taxed by the sales tax), it makes no sense. It would be like charging someone 20$ for service, but handing the bill back as an instant rebate. If a charge is paid back by the charger, does it even exist? But because of inefficiency, it will exist; the charged will be the loser. The rising price is enough Just by the very fact that the price is going up, and the market trend is that it will continue to rise, is incentive enough. It does not take a genius to figure out that one of the largest pillars of the world (it is responsible for just about all the food on the market, as well as the delivery of just about every product) is a large market, ready for a cheaper solution. The open market is more likely to get it right It is a simple probability thing: if one person (in the legal sense) roles a ten-sided die, one in ten times she will get a ten. But if one million people each role a die, 100,000 will get a ten. It is simply better to let the open market determine the actual correct price, purely statistically speaking. Then, once someone has the right price, all others will be forced to meet or exceed this number. Those who get it or better get business; those who don't get none (assuming that all other factors are controlled for. This means that oil will cost more on Ellesmere island than it would, say, right next to the oil refinery in Alberta). On top of that, the people in the market have two things that the governors of the market will never have: boots on the ground, and immediate consequences. These people's jobs are to judge the optimal price, and they suffer the consequences when they get it wrong (less right than the competition). Bureaucrats have no hope of ever acquiring that knowledge, and, because they are not dependant on getting it right for their jobs and income, no incentive to perform. It's not our job It really isn't the job of government to be encouraging and discouraging various practices that do not infringe on the rights of other. As explained above, a bureaucrat has no chance against the open market, and his efforts will only further mess up the economy (see the abnormally high price of dairy products, courtesy of the dairy marketing board. Also see the ethanol boondoggle in the US; even Al Gore admits he backed it to support his buddies in the farming business). Because of this, it just doesn't make sense to go around managing economies, and so it shouldn't be a role of government (the same way heavy-machinery operators don't work in chemistry labs: they could, and might even have the occasional success, but it would just be better to leave that job for chemists). I hope that I have provided a good case against increasing taxes on oil. The idea of a tax who's proceeds go to those who pay it to pay the tax is absurd an inefficient. The rising price is incentive enough to spur innovation, and, left on its own, the open market will get the right price better than a meddling bureaucrat. Because of this, it would be best to leave the free market to do its thing, and rectify the situation if it needs correcting, and determine that on its own. Remember, even if there is no demand, people will always fiddle and explore: gasoline was originally discarded because no-one could find anything to do with it, and then along came the internal combustion engine (an oversimplification, I know).

Can you do math?

The idea that the Bush tax cuts are the reason of the deficit is just wrong. Allow me to demonstrate.

The math

How annoying the facts get in the way. The CBO (Congressional Budget Office) estimated that extending the tax cuts would cost 2.8 trillion dollars for extending them through to 2017 (from 2007). But these are the cuts for everyone. The "rich" bracket tax cuts will cost about 700 billion for the ten years. That's 70 billion per year. But yes, that 70 billion will magically solve the 1,480 billion dollar deficit (this is just an estimate; imagine the actual deficit). So that would only leave 1,410 billion dollar deficit. (As a tangent, the richest people in the US no longer have enough total combined assets to pay off the deficit for one year.)

Idle money

If you think that the money could be better spent helping small businesses, you don't know how banks work. When a rich person (or any person) has money, they don't just put in under a mattress or in a safe. That would lose money (because of inflation) at a rate between 3 and 5 percent. So they seek elsewhere to put it. One option is to invest it in the stock market. The upside is that one can make significant increases, often out-pacing inflation. The downside is that one stands to lose money (called risk), and it is not easy to pull small amounts of money out from the market (one needs to find a buyer). One could also invest it in bonds, but the risk of loss is traded for lower returns. The last option (leaving out investments in hard commodities) is to place one's holdings in a bank, which will pay moderate rates for very low risk.

But the bank doesn't make money by paying you interest, and holding on to your cash. They loan it out, or invest in (which is also like loaning it). This money does not sit idle in a bank vault, collecting dust, waiting to be withdrawn. It gets re-invested, helping those small businesses, either by buying stocks in the public ones or giving loans to the private ones.

Bar stool economics

I could explain what this is here, or I could just link to a video. As explained in the video, the rich already pay most of the taxes, and it is logical that a tax cut for the rich will end up being a larger dollar value, because it is of a larger amount.

I hope I have offered up a convincing case to at least end the rich bashing for a few days. The idea that it is the rich that are bringing down the US is flawed to its core. In my opinion, it is overbearing government, supported by both big businesses and big unions, that is killing the country. If it were simply easier to start a business, it would be easier to become wealthy, and then the divide would be lessened, allowing good people to rise to the top, and not just those who were there first (who are being unwittingly entrenched by the well-meaning but misguided regulators).