Re: What if and Why of Zero Taxation

["John O'Donnell" <jackodonnell@xxxxxxx>]

Schulte-baeuminghaus wrote:
>
> Dear John,
>
> If by a "stipend" you mean a handout, then I do not agree - except in the
> emergency that the society has failed to provide reasonable employment
> opportunities for those who are willing and able to work.

Yes, I mean a handout. It is payment to each of us for
granting to some of us the privileges that attach to
ownership. Although it is not the reason I propose the
stipend, if you can recognize that there is no original
grant of ownership of anything except by force or
convention, then you may recognize that each minute grant of
private property denies to all others access to the grant.
The stipend is only the moral compensation to each of us for
surrendering our minuscule part ownership that precedes the
grant to one of us. My perception of giving to those in need
as a charitable act of morality is for private charity to
accomplish, not government.

The actual reason I propose the stipend is the amoral
consequence of its effect on economic production. With the
grant, the market determined price of labor [i.e. -- THE
variable cost of production.] that takes account of not only
the laborers share of the market price of his production but
also the negotiation of that share in recognition of both
the expectations of labor's needs, labors burdens [i.e. --
Such as taxes on earnings and other expenses experienced in
providing that labor.] as well as capital's share of the
produce becomes less. By providing a stipend and eliminating
taxes on labor to reduce the cost of providing that labor
the variable cost of production is reduced and the economic
point of diminishing returns is thereby increased with its
attendant lowering of prices to increase demand for the
higher production needed to raise production to the higher
point of diminishing returns.

The taxes forgone by eliminating the taxes on labor are
replaced with a tax on the privilege of limited liability
granted by society. That tax, by its progressive nature and
the method used to determine the rates for each progression,
also tends to encourage increased production as it is a
"fixed" cost of production which means that it becomes less
per unit of production for each increase in the rate of
production.

This is a brief explanation of a more thorough analysis
demonstrating that a proper structure of taxes and subsidies
with meaningful feedback signals to determine the optimum
amounts of the taxes and stipends that is presented in my
_Three Steps, etc._ online at:
http://www.geocities.com/jackodonnell.geo/c00r4.html

> On most of the other points, I think we come together only by chance - or
> mischance.

No, I would say it is by design. Our points of agreement are
the aims to be attained our points of disagreement seem all
to be method.

> At one point, you say -
>
> > However, I don't recall any restrictive monetary measures at
> > the time.
>
> Do you remember anything that happened in July 1969?

In '69 I was working as an engineering program analyst in
Washington, D.C. and had little interest in things economic
but I do recall the price fixing exercise that anyone with
even half a brain [Except, perhaps economists.] can se for
the foolishness it is.

> I'll jog your memory: Man landed on the Moon.

Yea, I remember that. I was visiting an Uncle when that
happened and he was furious that I wanted to stay in and
watch while he wanted to visit the local gin mill.

> That same month the Fed raised interest rates.
> A sad synchronisation.

That I don't recall.

<<SNIP>>

> Most things have several, probably interlocking causes.
> I don't want to insist on one cause when there might well be several.
> But has it ever occurred to you that what the Fed did in July 1969, just
> about the time that Man first landed on the Moon, might have had something
> to do with our failure ever to attempt another such enterprise since?

Yes, most things do have interlocking causes but most also
have very few causes that can be both controlled and
monitored for need to change the controls. As I said above,
economics was not my pursuit at the time but now I find the
foolishness of economists believing in the effectiveness of
monetary policy to supposedly "pump prime" an economic
malaise is such an obviously misplaced belief that I'm
inclined to rank economists with astrologers in their
understanding of cause and effect. [ This is also part of
the discussions presented in _Three Steps, etc._.]

<<SNIP>>

--
			-- jbod

		Tax Privilege, Not People
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