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Subject:  Re: Stimulation and The Lack Thereof Date:  8/14/2004  12:50 PM
Author:  sgtjoefriday Number:  8087 of 10597

Wow, where do you live that your property taxes rose on 2.5% in three years?

My original comment was not that my property taxes had increased only 2.5%, but that my property insurance had, viz:

Taxes are not properly included in insurance. People choose, collectively, their level of taxation. It is not a production cost (including profit) that is built into prices and passed on to willing consumers.

My property insurance bill hasn't hardly budged. Last year was the first increase in 3, and it was a whopping 2.5%

Property taxes leave you with options. Not always attractive ones, but options. You can move to a less expensive house, demand your local reps not spend so much, &c. There are fewer options on say, obtaining food and other items where inflation is measured.

If you think that the wealthy don't put a large part of their fortunes into Treasuries and existing stock, I'm afraid you don't understand the wealthy. Some put a part of their money into new stock issues, corporate bonds, and start ups that may eventually result in corporate growth and stimulative productivity, but that can take many years (for example, more than 10 for and how many competitors were ruined while was losing money?) and is an iffy proposition for even the most knowledgeable investors.

I didn't dispute that the rich practice asset allocation and that "secure" asset classes play a part in their holdings. My contention is with the assertion that marginal increases in their means, such as from a tax cut, will disproportionately flow into such secure classes over less secure (but more economically stimulative) classes. Particularly when you consider the demographics of, "the rich". Households making in excess of $100k are paying 65% of the taxes. So, a dual-income family where each earner makes approximately the US median income would be included in "the rich". We're not just talking about Richie Rich here (even though the government has no more right to his money that anyone elses), we're talking about people who have families and who are saving for retirement and who might not throw everything into t-bills. Some of the marginal tax savings from tax reductions might indeed flow into treasuries, &c., but I have a hard time believing it constitutes a significant portion.
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