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Author: diegorgazzi One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 254188  
Subject: Re: Mechanical Investing and the Business of Lif Date: 7/10/2013 12:12 PM
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Do you want a road leading to your house? Do you want street lights? Storm drains? Do you want police and fire protection? Those are all local services and the most sensible way to fund them is through a tax on the property that benefits from them.

We tax ourselves because we are collectively responsible for The Commons.

I'm not saying the government doesn't over-reach sometimes, or even often, but there are many things we all want that cannot be provided any other way.

I don't know if the balance between income taxes, property taxes, sales taxes, etc., is optimal. But some balance is needed so that we each more closely pay for the services we use.


Sure I agree I need some of those services/Public works projects, I'm an Engineer, I design some of these things. I also know when the government pays say $1,000,000 for a public building, for example, the same building would cost about $600,000 if the owner would be a privately held company instead of the government.

In fact, our Engineering fees are based on the cost of the project when it comes to Government work (this is an industry standard, where the government sets a % that you get), so the more expensive the project is, the more money the consultants make... There is no incentive for the consultants to make a more efficient and less expensive result, and this goes for everyone involved in the project, not just the designers. The incentive is the opposite, to make the project as expensive as possible. Everybody, from the banker sitting at his desk in a 50 story building to the guy with the broken back mowing the yard, want the government to spend as much money as possible in the project.

Also, I have yet to say that the Police prevented crime or that they have solved the majority of crimes. Every time they show up the crime has already been committed (and if the crime is theft or kidnapping, good luck in having the police actively trying to solve the crime). Have you had a traffic accident in a parking lot of private company? You guessed right, the police can't help you there either.

I've had a much better response and service from a private security company than the police. And you know the percentage of your taxes that go to Police Union? - and by police Union I mean work that has nothing to do with protect and serve the public. You'll get a heart attack.

Fire fighters, yes, I need them. But, do I really want to pay taxes to pay a firefighter $80k to $150k/yr and give him a pension for the rest of his life?

My final point is, the majority of the portion of real estate tax goes to services that most people don't need or want. For example, we pay 3% a year in real estate taxes out of which more than 33% goes to fund elementary, middle, and high schools. So, if you have kids going to public school, then your kids will attend from age 5 to 18, that's 13 years, but you'll have to pay your entire life. If you don't have kids or if they are home schooled or going to private school, then that 33% portion is going out the drain. We don't have a state income tax but I'm sure the other states where the real estate tax is low, the higher state income tax more than makes up for it. And let's not kid ourselves, we spent so much money on Education in this country and yet, Chinese and Indian students occupy the vast majority of the advanced sciences classes at Universities.

Do you live in a rural location, where there are no schools, no roads, no sewers and no electricity? No need to despair, the government still wants you to pay taxes. What about living on a Boat? Yes, you still have to pay taxes. Heck, you can't even fish without paying the tax (license).

The portion of taxes that actually goes towards the street and sewer getting to the front of my house is minuscule and yet you're getting taxed as if you drive through every single street in your neighborhood and use every single bathroom in your neighborhood before reaching your house.

There are small towns that have switched almost all of their public services to private companies, which has worked much better but I can't move to a town of 5000 people (I'd be nice, though).

When a company is in business, that company has to take control of expenses and increase income (and the customer service needs to be impeccable), otherwise it goes out of business or loses its clients to the competition. Not so with government because they have an infinite stream of income (from us) and is a monopoly so there's nothing you can do about it if you don't like the service. That's just not right.
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