Friday, April 15, 2011

Trading v. Consumer Economy

Modern America is a consumer economy. We are conditioned to buy cheap stuff then toss it out. I look at the garbage heap surrounding me and figure that the plastic clothes bin and garbage can are only two possessions I own that are likely to survive me. All of my clothes, my rusting car, furniture and electronics will be in the landfill on my passing.

America was not always like this. Traditional America was more of a trading economy. People were engaged in trade ... not just consumption. People bought goods eying both the current utility and long term value of the good.

My parents tell me about how their parents lived in world where businesses would actually take goods in trade for other goods. My mother owns a rocking chair that was made to pay for a month's rent then used by the landloard to pay my grandfather for an odd good.

A chair was actually used as part of commerce.

People trading goods amongst themselves, of course, is an irregular activity. This freedom to trade is something that progressives cannot stand.

FDR and other progressives set forth to stop on the throats of the people with a vision of a world where people were reduced to cogs living as consumers who bought highly regulated products from highly regulated companies.

The progressives created a tax and regulatory structure that is weighted against individuals and businesses that attempt to trade goods.

The local tax code demands a sales tax on all transactions (Utah is around 7%). Federal law requires a 28% capital gains if the price of a product changes in relation to the dollar.

A 1964 silver dime provides a good example of our corrupt system.

In 1964 dimes were still made of silver. People could buy a hamburger for a dime or a full meal for a quarter.

The silver in a dime is currently worth about $3.00 (which is the price of a hamburger). A quarter is worth about $7.50 which is the price of meal at a restaurant.

Despite the fact that a dime did not increase in purchasing power, a person who saved a dime from 1964 and sold it for $3.00 in 2011 is legally required to pay 28% tax on the inflation plus whatever local and state taxes apply.

BTW: If you ever bought or sold collectibles without paying the capital gains tax, you are a tax cheat.

This complex tax structure doesn't just apply to dimes. It applies to all products that have intrinsic value. If you bought a bottle of wine, put it up for a few years then resold it at a higher price, you would owe capital gains tax on the transaction.

There is a strong and growing black market in the United States where people trade goods with paying the apropriate taxes.

What happens is that that the tax code makes it next to impossible to form a vibrant business plan around trading goods.

By taking away the ability of people to trade goods, progressives are systematically reducing Americans to slaves.

If the common man was allowed to legitimately engage in the trade of goods, there would be less waste and less disparity between rich and poor.

Our progressive overlords (Obama included) have engineered a dystopia that reduces the mass of people to poverty and dependency.

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