tax revolt tea party federal spending internet

Most private fortunes come from public favors
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Senators attack estate tax, Taxpayers attack others

Taxes need not reduce your earnings. Government could forget taxing income, sales, and buildings were it instead to practice geonomics, to recover the commonwealth. What wealth is that? See Kinsley below. We trim, blend, and append three 2009 articles from: (1) USA Today, Apr 12, on tea parties by Oren Dorell; (2) The Christian Science Monitor, Apr 2, on property tax revole by Patrik Jonsson; and (3) the Washington Post, Apr 10, on heirs by Michael Kinsley.

by Oren Dorell, by Patrik Jonsson, and by Michael Kinsley

What started out as a handful of people blogging about federal spending -- the bailouts, the $787 billion stimulus package, and Obama's budget -- has grown into “Boston Tea Parties” across the country. The biggest demonstration so far drew 6,000 people in Cincinnati.

A nationwide protest in 500 cities and towns is scheduled for the April 15 income tax deadline. The goal is to pressure Congress and states to reject government spending as a way out of the recession and build an anti-spending coalition around regular taxpayers.

The United States was born out of a tax revolt, ignited in 1773 by colonists who dumped chests of tea into Boston Harbor, but little happened in the two centuries that followed until the California property-tax revolts of the 1970s. The inspiration for the tea parties was an on-air rant Feb 19 by Rick Santelli of CNBC, who complained that Obama's $75 billion bailout of mortgage defaulters "rewarded bad behavior."

Organizers were not pleased by George W. Bush's performance on spending, either, but what moved them to rallying in the streets was Obama's proposed $3.6 trillion budget, a package the Congressional Budget Office says would produce record-breaking deficits of $9.3 trillion over 10 years.

The Information Age has given people the ability to network as never before. In that sense, the Tea Party movement resembles the early days of, which began in 1998 as a small, tech-savvy liberal group and became a behemoth in Internet fundraising and rallying. The strength of the Tea Party movement is the emergence of people not known for street action.

JJS: While politicians miss the mark of taxing fairly and spending wisely, members of society should contribute to group welfare. One solution may be to earmark the income tax for war. Taxpayers might not object to national defense and would object to mere militarism. As for “butter” -- social services -- pay citizens directly a share of the commonwealth and let them pay for schools, medical insurance, etc, eliminating the cost of bureaucratic overhead. Getting the dividend, citizens could also easily afford to pay society for the infrastructure that pumps up the value of land.

In many cities across the US, homeowners are filing record numbers of assessment appeals, wanting their property taxes to reflect the shrinking value of their houses.

Property taxes have become a rallying point for disgruntled Americans because, unlike sales or income taxes, they can be challenged directly by individual citizens: Some 40% of assessment appeals are successful. The only tax where the taxpayer audits the government is the property tax.

Yet the movement threatens already stressed counties, putting the tax receipts that pays for schools and police at risk. Many states’ expenditures were growing by 10% a year before the recession began.

Assessment appeals are up in cities nationwide. In metro Atlanta, more than 50,000 people -- a 10-fold increase over last year -- filed appeals; average home prices are down to 1996 levels. In Nevada’s Lyon County, appeals are up 30-fold. One reason: Unemployment is at 15%, the highest in the state. Ann Arbor MI has seen a record number of tax appeals this year. People who bought in recent times at the highest prices are the ones whose values have fallen tremendously.

The standard wisdom is that homeowners win on the upside and lose on the downside and over time that evens out. But they don’t want to hear that when they’re worried about their job and their house value.

JJS: Why do land prices rise and fall wildly? Speculators bid up the prices of assets until they’re no longer realistic. Savers would not speculate in land if we taxed it. Savers would invest in actual production if we de-taxed that. Then if somebody got rich, their fortune would be earned.

The Senate is debating letting the estate tax expire. Expire? If wealth needs to be earned, inheriting does not qualify.

Peruse the Forbes 400 list of richest Americans. Few of them made the list by building the proverbial better mousetrap. The most common route to gargantuan wealth, like the route to smaller piles, remains inheritance.

Dozens more derive from the rising value of land or other natural resources. These businesses are fundamentally different from mousetrap building. Land does not need to become "better" to increase in value.

Other fortunes depend directly on the government: drilling, mining and mineral rights; cellphone licenses; cable-TV franchises; small-business and minority loans. Medicare and Medicaid reward owners of health care and pharmaceuticals.

Selling in the world's richest market helps. An American doctor earns many times what the same doctor would earn in, say, India. The American by doctoring did not alone create the richer society.


Jeffery J. Smith runs the Forum on Geonomics.

Also see:

DC fixer-uppers become tax ruins or renewals?

What's the matter with Michigan?

The Oddly Powerless 'Global Power Elite'

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