Nobel economist and NYTimes columnist Paul Krugman is calling for a return to the 91% tax of the Eisenhower era. I said this was inevitable, here and in my classes. And it is, given our system, and the trouble we are in, it is necessary.
Now, what will happen? Will it be a job killer? You bet! Not the kind of jobs that matter. People who are in it to loot the money and run away, like the Great Twinkie Caper, won't do that if Uncle Sam gets 91%. Will it kill innovation? Now way. All federal taxes are always voluntary to an individual. Just like unemployment is always voluntary to an individual. Individuals will get busy innovating.
You see, when taxes shoot up to 91%, I'll just spend nearly everything inside the company. On my lifestyle. The Twinkie-killers want to take the money out and away. They would have no interest in spending all the profits inside the company, living La Vida Twinkie.
At 91% tax, certain kinds of businesses would fail. Those that are set up to extract large, short term profits. You tell me who they are. Just listen to whatever CEO condemns Krugman. Then when the 91% tax kicks in, short that CEO's stock.
As many companies fold, many people will be unemployed. When self-employment is necessarily exempt from the 91% tax, many people start businesses. Thus we will have a small business renaissance.
So, my economic policies, given the "inevitable is the ideal":
1. Regarding the fiscal cliff? Gun it and get sailing out over it as soon as possible. No more kicking the can down the road. Cut the military spending deep, deep, deep.
2. 91% percent tax rate. Bring it on!
3. Get rid of the home mortgage deduction. Yipeeyaiyay! Housing prices would drop as sales skyrocketed.
4. Let Volcker run the Fed again. Interest rates up to 22% and gold up to $5000. For about 20 minutes. Talk about a reset button!
I think this is the first time I've ever agreed with Krugman.
Feel free to forward this by email to three of your friends.
Now, what will happen? Will it be a job killer? You bet! Not the kind of jobs that matter. People who are in it to loot the money and run away, like the Great Twinkie Caper, won't do that if Uncle Sam gets 91%. Will it kill innovation? Now way. All federal taxes are always voluntary to an individual. Just like unemployment is always voluntary to an individual. Individuals will get busy innovating.
You see, when taxes shoot up to 91%, I'll just spend nearly everything inside the company. On my lifestyle. The Twinkie-killers want to take the money out and away. They would have no interest in spending all the profits inside the company, living La Vida Twinkie.
At 91% tax, certain kinds of businesses would fail. Those that are set up to extract large, short term profits. You tell me who they are. Just listen to whatever CEO condemns Krugman. Then when the 91% tax kicks in, short that CEO's stock.
As many companies fold, many people will be unemployed. When self-employment is necessarily exempt from the 91% tax, many people start businesses. Thus we will have a small business renaissance.
So, my economic policies, given the "inevitable is the ideal":
1. Regarding the fiscal cliff? Gun it and get sailing out over it as soon as possible. No more kicking the can down the road. Cut the military spending deep, deep, deep.
2. 91% percent tax rate. Bring it on!
3. Get rid of the home mortgage deduction. Yipeeyaiyay! Housing prices would drop as sales skyrocketed.
4. Let Volcker run the Fed again. Interest rates up to 22% and gold up to $5000. For about 20 minutes. Talk about a reset button!
I think this is the first time I've ever agreed with Krugman.
Feel free to forward this by email to three of your friends.
2 comments:
Jon, regarding # 1, we would be living in a mad max world in about 90 days. At least if they keep printing you have time to prepare..
Why would cutting defense spending make any difference? The wars are mostly theatre, and a stunning waste of blood, talent and treasure. We transitioned form WII total war to peacetime, and yes it was tough, but kicking the can down the road means the reconstruction is all the harder. There is no way an individual can prepare for what is coming. All talk of "buy gold" or move to a farm ignores that there is no way to see what will come. Starting a business is fine, for the heart of business is flexibility. Printing is fraud and doing damage, how we got here. It makes the stock market go up, and people feel all will be OK. the "time to prepare" was in 1971, 1979, 1981, 1987, 1992, 1997, 2000, 2005, 2008. After that, if you are not prepared, it is too late. Start a business.
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