Dorie Rae Gallagher: Dorie wrote: It will not only be the poor people leaving the City! I know of several who are talking about leaving...and they are not poor...they too, are an asset to the city. However, they do not want to be stuck in the City paying the type of taxes that are coming in the future without schools, libraries and core services. Lack of services creates broken neighborhoods and when your tax base moves out is when the city blight moves in. I personally would move out of Hennepin County all together.
Peter writes: I agree that taxes are high and people are moving out of the city, but the taxes follow property values (theoretically anyway), the root of the problem is an out of control real estate market. As far as people leaving, I don't see that as an immediate problem for the city in terms of tax base, it is a problem in keeping society balanced. Rich people are moving in and are leading the real estate binge; poor, working class, and middle class are going to be moving out because they can't afford the prices. The suburbs will get saddled with social costs the city now carries, and they don't have the tax base to pay those costs. It isn't a recipe for an egalitarian society. If we want a decent lifestyle we have to pay for it and have policies that make it possible. There is no free lunch.
As far as the property taxes, I agree they are too high, it isn't fair to burden primarily home owners and small business like this, property taxes are a regressive tax. I believe everyone should pay, and the only way to do that is shifting the method of payment to income taxes. If you lose your job, property taxes can bankrupt you. Income taxes on the other hand can be adjusted, based on your ability to pay and all citizens share the tax burden for services they all receive, it is a progressive and fair tax method.
Victoria Heller wrote: Wrong on all three counts. We are the greatest DEBTOR nation in the history of the world. Asians must lend the U. S. $1.8 Billion PER DAY to finance Americans' appetites to buy things they can't afford. From yesterday's Daily Reckoning.....
Peter writes: I agree that we have a problem in our balance of payments. Our trade defecit is bleeding us dry, and our government can't balance its budget and is running huge defecits. Last I checked the US had 21% of world GDP and the EU had 19% of world GDP and if the dollar declines just a little bit more the US will be #2 on the world economies list. USA #2 just doesn't have the same ring to it. That doesn't mean we shouldn't pay for services and policies which can make our society better. We just need to be prudent in how we do it.
As far as the Asian economies and the dollar, I agree it is a problem, they buy dollars to depress their currencies and balance the trade defecit. They own roughly 5% of America now. Both the Yen and the Yuan are artificially low when compared to the dollar. If they stop buying dollars, pressure on their currency will go up dramatically and they will lose their trade advantage. That is why the Chinese have such a large competitive advantage in manufacturing, they keep the Yuan artificially low. That is how the current economic recovery in Japan can be described as an 'export based' recovery. On the other hand, if the dollar falls we will be forced to raise interest rates in order to attract world capital to pay for our Federal defecit and pay for our consumer society. That means interest rates will go up. If interest rates go up, our entire consumer economy is inhibited, perhaps triggering a major recession with high interest rates, something not seen since the oil embargo. Of course Japan and China wouldn't be well off if that happened, they are dependant on exports to the US which would dry up. Ironically though, this would solve our property tax situation, because real estate prices would probably fall, and property taxes would fall with them. None of this means we shouldn't support a fair and just society.
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