Tax the children well...

Should college students pay taxes in the city they are attending school?

It is obvious that they should pay some taxes as might apply to anyone else (ie, sales tax). However, should their education be taxed and if so, what model should be used?

Taxes, as they are in the US, are levied according to ability to pay. The concept of taxation with representation is no longer applicable. When did the Fed ask you if it was OK to increase the money supply, which of course leads to inflation, thereby devaluing your money? There is no moral reason why rich should pay a higher percentage of their income in taxes than the poor except that others impose it on the rich and forgive the poor. It is pure expediency to get more money, or perhaps, a retribution against those who would enrich themselves through hard or smart work.

There is no reason to assume a priori that no college students can pay extra money. Students are not a protected class and are not minors. They can be drafted and can die defending our country. What model should be used?

Based on the Obama Peace Prize, one could tax students based upon their potential income. An English major could be taxed at a low amount while a computer geek could be taxed more heavily.

One could tax them based upon the concept that their job is to learn, which means they have a job. The tax would then be based on the occupation tax. In Pittsburgh, it is $52.00/yr.

One could tax the education, a new concept. This would be an "education tax", sort of the opposite of an educational grant. Mayor Ravenstahl has proposed a 1% tax. This opens a whole arena for new taxation.

Whatever good deeds students do in the community should not be a reason not to tax them, as many taxpayers also perform good deeds.

Who is opposing the taxation of student tuition? Conservatives because they believe that taxation of education is wrong-headed, interfering with the freedom of individuals to get a good start in life and middle class liberals because it is their children who go to college and when government needs money for programs they believe in, they want others to pay for it.

For once, hypocrisy and morality are on the same side.

Economic Ethics

This is my attempt at providing a universal code of ethical behavior in the area of economics. It tries to separate economics from politics. Suggestions for additions and modifications are welcome!

Individual Economic Ethics

1. Don't take anything that isn't yours or hasn't been given freely by another. Taking by deceit or fear is the same as taking by force. Both are illegal taking. "Anything" includes dignity, so politeness counts.
2. Make as little impact on the environment as necessary to accomplish your tasks: conserve and preserve; waste not and future generations will want not.
3. Have Personal goals to: Learn. Earn. Have Integrity. Contribute
4. Support your government so that it can be empowered to fear or favor no individual or group. Ask not what your government can do for you, but what you can do for your government. If your government cannot get over its fear or favor, it is time for a new government.
5. Join groups that promote your best self.
6. Believe in economic equality and economic freedom. Each can decide what career path to follow, but each is also free to succeed or fail.

Political-State Economic Ethics

1. Service in the public sector is an honor. Treat it that way.
2. Taking from individuals in the name of the common good should serve only the common good. It should never be self-serving nor should it serve individuals or groups by taking from other individuals or groups. (Typical services that serve the common good are armies to defend the country, interstate roads, courts, police, prisons, and some national agencies such as the CDC and the EPA. Public education, hospitals and maintenance of local roads and highways could be handled by state and local governments.) The definition of common good is that where conformity outweighs individual choice. This should be narrowly defined.
3. Protect the citizens from external harm
4. Protect the citizens from indifference, incompetence, corruption and pandering within the government through internal and external assessments and controls. All of these actions are equally unethical for governments.
5. Protect the citizens from each other and from groups through honest police and fair courts
6. Maintain general services such as roads and the environment
7. Maintain the integrity of the currency through sound monetary policies. Anything other than this would be an illegal taking.
8. The government may never be a servant of an individual or a group. Serving the interest of one group or one individual over another is not the job of the government and is unethical. The government may, however, use its legal system to determine if any individual or group is fraudulent or is attempting to gain thru coercion or bribery.

Group Economic Ethics

A group is any collection of people that is not a government. It could be a corporation, organized crime, a religious organization or a social network. Groups have an identity and a mission statement (which could be to promote themselves, earn money, or even just to have a good time).

1. Confidence in Competence. Internal assessment for external assurance that members are who they claim to be and are competent and qualified. Especially helpful for trade unions and professionals such as attorneys, accountants and physicians.
2. Advocacy tied to the marginal added value provided by members of the group as compared to those who do not belong.
3. The same rules that apply to an individual apply to group.

Comments and suggestions are welcome!

Moral Relativism and Freedom

At first glance, it would seem that these are similar: the more you are free, the more you can have moral relativism and vice versa.

However, in the real world, the opposite happens. Actually, we exist in two worlds: the world of politics and the world of economics. A world of moral relativism is a world where economics becomes unreliable. After all, if I believe that you should honor an agreement to pay me for goods you purchase from me and you do not, trade will fall apart. Further, if the courts side with you because of who you are or who I am, the relativism becomes even more unwieldy.

Since in most circumstances the world of economics is more impactful on our daily lives than the world of politics, it would seem that some universal, absolute moral code is necessary to maintain economics. Indeed, many of the new writings in economics speak of market-states as being different from nation-states.

In the absence of an absolute code of behavior, we get what we have now: nation-states with competing agendas, corruption, organized crime, slavery, black markets, and loss of personal freedoms as governments attempt to identify and punish wrongdoers, often by running roughshod over the good, common individual. Governments and courts have favorites and those they fear, leading to inequities at the highest levels.

It is time for a change.

Others in the past have argued for the existence of an absolute code. One example is in the book "Atlas Shrugged" by Ayn Rand.

Look around you and see the future. It is anarchy that arises from moral relativism, followed by the reactionary response by governments to oppress individuals, leading to shared fear and misery.

Some believe that there is no other option. I believe that there is: a morally absolute code of conduct.

In my next blog, I will list my provisional Universal Moral Code.

Someone has some splaining to do!

The above chart shows the relative amount of time a worker, earning the average wage, spent to purchase each of the objects listed, comparing 1969 to 2009. If the amount of time was the same, the score would be 1. If it took less time in 2009, the score is less than one. And if it took more time in 2009, the score is greater than one.

As you can see, everything is nearly the same except for gold, which takes 4 times as long as it did in 1969. This suggests that either gold has become rarer, is speculated to a value greater than its true worth, or that all the other prices are way too low. If there is a link between gold and the other commodities, then we should expect gold to fall or the other prices to rise. DocBrain worries that if gold reflects where the market should be, then prices will skyrocket, leading to hyperinflation.

However, it is possible that everything is where it is because of a new reality. It is possible that gold is relatively rarer, as there are more people and less gold to extract from the earth, while other resources can grow with innovation. For example, raise more cows and you have more hamburger. In that case, the traditional link between gold and money would only have meaning for gold, as all the other commodities would just stay where they are.

We then only have to worry about the relative value of currencies, which wll reflect the money supply. As the US has an increasing trade deficit, our money supply will need to increase, leading to a more gradual inflation. Unemployment and social welfare programs will also lead to more handouts and more need for money, so again more inflation.

The actual purchasing power of the dollar vs other currencies where there is less social welfare and more employment will fall over the years until we get our priorities straight. You can take that to the bank.

Belief we can change to

There are two major forces in the world: politics and economics. The power of economics is in wealth generation through innovation, industry and trade, while the power of politics is in coercive force of those who wield might, sometimes (but not always) backed by legal "right".

The free market can be cruel and unfeeling (after all, the hand is invisible). Slavery and pollution are common for products sent to distant markets. Those who fund the market can create a false economy where the lending of money becomes more profitable than the actual innovation, industry and trade. Where there is ineffective law enforcement, criminal organizations can take control of markets. Appetites for goods and services that are outlawed by governments can be satisfied on the black market, usually a hidden economy.

In an attempt to make the free market less cruel and more feeling, politicians attempt to "fix" the free market. Their fixes include: wage and price controls, money supply manipulation, rules, regulations, bureaucracies, taxes, fines, licenses and tariffs. Politics also has it's seedier side, with corruption and payoffs, vendettas against and alliances with one or another private business owner. Politicians can back those who have money, those who hire people or those who provide labor, or even those who are unemployed, using coercive power to "entitle" whatever group has the ear (and pocket) of those currently in power. The net effect of politics is in general to weaken the market, but not to rid the private sector of its corruption, nor to check government's own corruption.

The best solution would be a free market that has some built-in moral code: that does not pollute, does not use slave labor, and places as fair a value on innovation and industriousness as it does on capital. All that is needed under this system is a government that guarantees the impartial rule of law, the safety of the citizens to do their work, and common networks of communication and travel. All that is needed of the average citizen is to have higher moral values. All that is needed of politicians and bureaucrats (both good and corrupt) is to get out of the way.

The alternative, more and more intrusive government with individuals trying to game the system to get an edge, is where the current administration is heading and is a prescription for disaster. This can do nothing except lead to more inequities or, worse yet, the equality of poverty. As people lose their wealth and lose their independence, more government control and oppression will be needed. This is the pattern of the past and is likely to extend into the future. If you doubt this, consider the town hall meetings where local citizens objecting to the new government health care plan were shouted down and opposed by bussed in groups of paid individuals who "supported" the health plan.

Believe this: in the power of individuals under a simple, small, fair and honest government to change the world.

Someone answer this one for me!

In 1969, a Monza sold for $2500. Gold was fixed at $35/oz. The median income in the US was $9400. So, an average car represented 27% of the median annual income and 71.4 oz of gold.

In 2009, a Toyota Corolla sells for about $15500. The dollar floats. The median income in the US is around $70000. Using the 1969 ratios, an average car should be about 0.27 x 70000 = $18,900, which is pretty close to what it was in 1969. So, the hour worked still buys the same amount of goods as it did in the past. However, if we look at gold, we see that the $18900 car represents only 18.9 oz of gold. Put another way, if you bought gold in 1969 and transferred it back into dollars in 2009, you could have bought a car for $71,400.

So, either gold is speculated at a higher price than it really is worth or the dollar is worth considerably less than it seems. In one scenario, the value of gold will fall dramatically, impacting those who speculate in gold. In the other scenario, the cost of goods will skyrocket as the dollar reaches balance with it's gold-based value, leading to hyperinflation.

What is reality?