So just now I went to the store and purchased a couple of those great Arizona cans-just $.99 for a nice big can 23 fl. oz. But when the cashier was ringing me in he made a comment that got me to thinking about taxes, economics, stimulus, fiscal issues, etc.
When he rang up my cans he was surprised to see that the price of each came to not $.99 but $1.08 each. I told him that this is nothing new. It's been that way for awhile. CVS and also 7-Eleven-ie, big franchises-always make you pay NY's sales tax of about 8.15 percent or so. Yet the small independent stores-around here you have some Spanish stores and also an independently owned gas station and they don't charge you the tax.
"That's crazy!" he declared. And he's right. And I've fumed about that before as well. But I suddenly reflected on how disingenuous this makes so many of the various "supply side" fiscal arguments you hear.
Currently I'm reading this book called "FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression" by Jim Powell-not surprisingly he's a senior fellow at the Cato Institute-or he was at the writing of the book, it was published in 2003-and editor of Laissez-Faire Books.
The general premise of the book is that anything you do to help the average guy that is not in the wishes of various wealthy interests is of course counter productive. Minimum wage laws of course merely add to unemployment, as do unions, regulations, and taxes either on big business-thought they always claim it's small business they are worried about-or on wealthy individuals will only lead to more unemployment as investment will decrease and meanwhile tax revenue will go down not up.
Anything you try to do to regulate the corporate interests or make the wealthy pay their fair share-in fairness many like Buffet and Gates say they want to pay their fair share-is going to depress investment and raise rather than lower unemployment.
Certainly Powell himself employs all the classics of libertarian full card monty-where you keep chucking and jiving until the reader just gives up and doesn't know what to think.
He claims that the SEC was a failure as the average S&P return in the 50s was no higher than the 20s-ergo it's pursuit of fraud didn't work! Such impressive lessons of economic Casusistry is an art, very well plaid full card monty.
Yet this mundane anecdote I mentioned at the top is just the point. We're told that you can't stop the banks from hitting customers with new fees, and any time you try to take the cost off the little guy and onto those who can afford them even a little we here that incentive to invest will freeze up. Yet if little mom and pop stores can pick up the Ny sales tax why can't CVS and 7-Eleven. As we have the example of the little independents paying for it, we know that big chains can.
For this reason all such supply side arguments must be examined very carefully. You can never practice too much caution.
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