Robert Schmid says, in part: >...Any system needs energy to keep > running. For an economy, money is that energy. If its all bound up and > not flowing, the economy slows down. When individuals have excessive > fortunes that they can not use, that money either sits and does nothing or > it gathers more money to it. In these cases, it wouldn't hurt to release > a portion of that money each year. > > Such a tax might encourage greater charitable giving or it might encourage > more investment in businesses and technologies...
[MH] Faulty assumption-- money doesn't sit idle. If money sits idle, it disappears! When you or I go to the bank for a car loan, a home loan or a small business loan, the funds that are loaned to us represent funds on deposit at the bank-- other peoples money. Money is invested, borrowed and reinvested continually here in Mpls,. throughout the country and around the world. The City issues bonds to fund affordable housing-- who buys the bonds and makes a loan to the City? How do they decide to buy our bonds rather than those from Madison, Wisc., or Phoenix? Comparable interest rate and risk, maybe? Those folks with 'excessive fortunes' (and our everyday pension funds) make the decision to buy those bonds. The money isn't idle. Foreigners loan the US government money every day-- they buy our debt (if memory serves, they currently buy about 40 percent of our debt, up from about 10 percent only a few years ago). In return, they expect competitive returns on the funds invested. As the value of the dollar falls, the foreigners demand higher interest rates or they may take their investment funds elsewhere... thus our interest rates have been rising, increasing our cost of living, even in Mpls. Likewise, the price of oil (the same oil that fuels the economy) is based on the US dollar. As the value of the dollar has fallen in recent years, the cost of oil has increased, irrespective of supply and demand. Add increased demand to the equation, and the cost of oil, gasoline and energy-intensive goods and serves rises even faster, reducing our disposable income available for other everyday living needs. Money flows internationally, like electrons in a wire, the direction and destination depending upon seemingly insignificant basis point differentials and assorted risk factors. A small business seeking a start-up loan is competing with other small businesses for those funds and the varied risks associated with each business are reflected in the interest rate. A higher tax on well-paid sports figures, etc. could simply be reflected in higher ticket prices at the gate, concession prices, etc-- not an inconceivable scenario in a dynamic marketplace. I'd suggest that rather than contemplating how to take 'excess' funds from other's "excessive fortunes' through various taxation schemes, it might be more productive for list members to strategize on methods to earn funds the old fashion way-- by providing needed goods and services in a competitive marketplace and by saving and investing wisely. Michael Hohmann Linden Hills independent candidate for 13th Ward City Council www.mikeforcitycouncil.org [EMAIL PROTECTED] > -----Original Message----- > From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] > Behalf Of Robert Schmid > Sent: Friday, April 29, 2005 10:44 AM > To: [email protected] > Subject: Re: [Mpls] Celebrity Tax > > > > Actually, David's suggestion was to tax wealth over a certain limit. His > choice was arbitrary but it could be reasonably keyed to an index which > predicts the amount necessary to live off of at a comfortable level for, > oh say, 70 years including inflation. > > Actually, this is not a terrible idea. Any system needs energy to keep > running. For an economy, money is that energy. If its all bound up and > not flowing, the economy slows down. When individuals have excessive > fortunes that they can not use, that money either sits and does nothing or > it gathers more money to it. In these cases, it wouldn't hurt to release > a portion of that money each year. > > Such a tax might encourage greater charitable giving or it might encourage > more investment in businesses and technologies which would otherwise be > considered too risky. In any case, jobs are created and money starts > flowing. > > Robert Schmid > Central > > > David Shove writes: > >> Or a Wealth Tax. Tax not just income from this year, but all > accumulated > >> wealth. Annually take a certain percentage of wealth over, say, 10 > >> million > >> dollars. Pohlad et al could either pay or move. snip REMINDERS: 1. Be civil! Please read the NEW RULES at http://www.e-democracy.org/rules. If you think a member is in violation, contact the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A Civil City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[email protected] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
