Taxes... and "The Economy," a Closer Look at a Crock of Lies!

Death and Taxes.

Usually attributed to Benjamin Franklin, the original quote — dating back to 1789 — reads:

 “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.” 

Our Property Tax Statement Arrived Yesterday

Depending on your perspective, the "good news" could be that the value of our house and land increased another 6%, according to the county. That actually marks the 7th consecutive year valuations have gone up... and we've only lived here for seven years.

Meanwhile, the functional reality of life is that we would have to be fairly lucky to get out exactly what we originally paid, if we were to put the house on the market, today.

In unrelated news, this is increasingly becoming a retirement area; last I looked at county statistics, the median age here had risen to over 56, meaning that (a) fewer and few people with school-age children live here and (b) more and more people with "fixed incomes" live here. 

Which leads me to my next beef: We're paying more money for school taxes than ever. Which is an odd fish, considering that just in the 11 years I have lived in this town, enrollment in our wee school district has declined from 1,550 students to 1,180 students. 

Now, on the opposite end of this equation, I decided to pull out our old INCOME tax returns. And, indeed, my feelings were confirmed: Doing much the same work for the duration, our household "adjusted gross income" has increased exactly 1% during the subject 7-year period.

Now, I didn't set out to write about about our personal finances; this is merely offered for illustrative purposes. The whole thing set me off thinking about this nebulous thing people call "The Economy."

Why "The Economy" Doing Better is a Meaningless Statistic

Now, we can all pick up a copy of the Wall Street Journal, Fortune or The Economist and read our way to the fact that "The Economy" is doing better than ever.

The stock market is up, Gross Domestic Product is up, "The Economy" is growing, corporate profits are making new highs and unemployment is at a new low. That all sounds pretty damn rosy.

But what does that mean?

Unfortunately — for many (or most?) of us — these facts are basically meaningless "rah-rah statistics." 

Let's start with the stock market, often touted by President Trump as a shining example of how well we're doing. As an isolated number, he's absolutely right!

But let's wrap some context around this: According to Gallup, fewer than 50% of Americans even own stock these days, a figure that keeps declining, and is now at its lowest in several decades. Moreover, the top-20% (income wise) own 92% of the stock, with the remaining 80% owning about 8%. 

My uneducated guess is that many of those bottom 80% are selling whatever stock they do have just so they can live. I know we sold our last bit of stock we owned to keep from having to file bankruptcy over medical bills, some 5-6 years ago.

So "the stock market" doesn't mean jack to me, or to anyone I know... except a couple of friends who were among the first 100 people to work at Microsoft. 

So what's my point here? 

There is a huge difference between "The Economy" and the "individual economies" of millions and millions of people. When we say that "The Economy" is doing well, that is a statement that the aggregate economic activity is robust... but it says nothing about where that economic flow is going. 

On paper, it may look good that corporations are getting "tax breaks," but if they are — as many evidently are — turning around and using the value of those tax breaks to increase dividends to shareholders (and particularly to holders of "preferred" stock-- yes, I was an analyst a long time ago) all we're really doing is creating "economic activity" that keeps money "churning" among the elite while labeling it "doing well."

Myth: The Rich Create Jobs — No, Not EXACTLY

It's a popular philosophy among fiscal conservatives to say that the rich are the world's "job creators." Whereas there's an element of truth in that, it's one of those grossly misrepresented paradigms that gets tossed around a lot my economic whizzes who spout party jargon without thinking things through. 

Indeed, the uber rich do create jobs, but it's not a "leading" factor in the economy, it's a "following" factor. The rich create jobs because there is demand for goods. And in order for there to be demand for goods, people who buy goods have to have money. 

It's a part of supply side economics I have never been able to wrap my head around. 

But don't take my poverty-destined word for it-- let me have a multi-billionaire venture capitalist explain it to you in this TED Talk instead, this is well worth a little of your time... and I'm going to put this bug in your ear as you listen: How can this also be applied to our ecosystem here on Steemit, with our Whales, Minnows and Plankton?

Anyway, I will now wrap this rather multidirectional post with the usual series of questions: How is YOUR economy, as opposed to "THE" economy where you live? Does it ever seem to you that the ostensible "facts" are actually lies? How do YOU believe jobs are "created?" This being a largely Libertarian and Anarchist community, I know many here consider taxes to be theft, but do they EVER apply? Leave a comment-- share your experiences-- be part of the conversation!

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Created at 180228 18:48 PST