Wednesday, September 28, 2011

Exponential Taxing

Here are the taxes on a $52 car rental at SFO.

Concession Recovery Fee 11.11 %
$5.86
Airport Access Fee 20.00/rental
$20.00
Tourism Fee 2.85 %
$1.49
Vlf Recovery .22/day
$0.44
Sales Tax (8.250%)
$4.80
Subtotal
$32.59

Calculate Estimated Total
Estimated Total
$84.89
Estimated charges are confirmed based on the information you have provided; only taxes, fees, and surcharges are subject to change.


So the taxes run about 60%.  One of the reasons "public works" cost so much is because the people who run them can charge so much.  You have no alternative when all Bay Area airports fix prices.

One reason things are so expensive is it is so easy to charge so much.  The federal travel budget is some 14 billion a year, of a 700 billion industry (not including military, most of which is untaxed, so it has nothing to do with my point.)  State and local government is on top of the 14 billion, lets say 85 billion for a total of 100 billion rounding up, because there are 2 times as many state workers (28 billion) and 4 times as many local govt workers (56 billion.)

Am I estimating too high, because local govt does not travel as much as fed govt, or go as far?  Well, you don't know your government.  Google "city travel budget cut" and you get 79 million hits.

There is talk to slash federal travel budgets, as well.  So what?  Well, if govt travel is 12% of the total, slashing that budget will reduce tax receipts for those expensive airports.  Then bonds are not supported, so there is either default or tax increase, which reduces tax income, so it is a nasty downward spiral.  Things get worse all over.

The money for this government travel comes out of producing people's pockets. So we pay taxes so travelling govt workers can pay taxes, on top of their travel expenses. It would be a good thing if the state travel budgets were cut, so we paid less in taxes. Then we'd have more money to pay the taxes on the bonds for airports for which we were charged too much for too much airport.  Maybe that is the point of slashing the travel budgets.  I doubt it, the money will just go elsewhere in govt expenditures.

Slashing budgets is good, as is cutting taxes, and deregulation is best.  We deregulated telephones in 1980 and we had the computer/internet revolution.  Deregulate, something, anything, so we can have something that actually grows and increases.

The Turkish economy is growing, because the Turks make things and sell them, without subsidies.  There is nothing in USA that is not highly subsidized:  food, housing, clothing, education, medicine, banking, transportation, poverty and obesity... so we have the terrible downward spiral of ever lower quality, ever higher prices, ever more government control.  And add the burden of pointless war to this, and we are stuck in the muck. It is impossible to recover economically under these conditions.

We have a tremendous obligation in the form of bonds for the infrastructure we built to support activity not needed. Default is the best answer, plus freedom.  Iceland did it and is already recovering.  Yes, there would be great dislocation among the powers that be, when they lose the tax revenues.  And they would rather rule over ruins than be a shoe clerk in paradise.

What to do?  Succeed in place.  Get self-employed.  Get exempt from the madness.










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