Monday, August 22, 2011

Inflation and Taxation

What creates inflation?  What drives that scary increase in the cost of goods which make your dollar's buying power decrease?  The investment adviser I asked said, "Labor cost. Wages."  So are labor rates in America rising?  Is the growing service sector of the economy unionized?  Are wages going to increase without organized demand?   Do we see inflation lighting up the horizon?  

U.S. manufacturing has moved overseas. Are we expecting the workers of Indo-China to take to the picket lines anytime soon?  Interest rates are at an all time low.  There is plenty of money to borrow should one want to invest in expansion here in the United States. So why are tax breaks needed for the highest income brackets of the population?  The balance sheets of corporate America already have cash and liquid assets a-plenty. How is allowing the rich to horde more money through less taxation going to help the country?   It certainly would seem that the redistribution of wealth through sorely needed public works programs (roads, rails and runways) that would derive funding from taxation levied on the abundantly reproducing investments of the ultra-weathy would make sense.  Why would any middle or working class American citizen be opposed to such a strategy?   

The U.S. emerged from WWII on the top of the economic heap.  Why?  Because the privatization of public money (tax money) for war-time manufacturing re-tooled American industry producing an abundance of jobs which were sustained through domestic consumption and export of post war product.  Why not apply the same method to a peace-time economy?  Dislodge the static holdings of the ultra-wealthy and put those dollars to work here in the United States, providing healthy environments through green construction, mass transportation and a universal health care system.  Why are Americans so afraid of sensible re-distribution of  wealth?  Rugged individualism?   (And where is the frontier that makes that story-book fantasy so appealing?  Afghanistan?  Iraq?)

When an inanimate object (ie. a half million dollars of investment savings) makes more money than a healthy adult American WORKING FULL TIME, something is wrong with the system.  Sure its nice to be the fellow watching the money make money as you tan on the beach, but is it socially just? 

Money that begets money should be taxed at a higher rate then the money made through direct labor.   That would seem to be a rather simple equation to apply in these days of trillion dollar budgets and deficits.  So why the great debate in Washington?  How can such a small percentage of the population have such a loud voice in Congress?  And when was it a bad thing to throw a buck or two into the collection plate?  I think it got nasty when the rich set out on a public relations campaign entitled " Trickle down economics."  God forbid Teddy Roosevelt's idea of a gradated tax system be employed to derive a larger percentage of capital from those who can most afford to part with it.  Gee... that would be... well... UN-AMERICAN!   

No comments:

Post a Comment