14 November 2007

Sales Tax Redux

Since I predicted the pattern of the government's reporting of the sales tax (high numbers reported at first, then lower numbers, then no reporting, then strong hints that that there won't be as much money coming in as expected; We're at the last stage now), let Me reanalyze what the sales tax has done and will continue to do:

1) Slow down the economy: Raise your hand if this seems blatantly obvious to you. (You Fools can put your hands down: We know you don't know how to read.) Even with oil prices and the real estate bubble blowing holes in economic growth for the U.S. of part of A., Our economy is not growing. The difference between some growth and no growth can be placed squarely at the feet of the sales tax because no other significant economic change has been made by the Aníbal "Jellyfish" Acevedo's misadministration and the legislature's criminally stupid incompetence.

2) Create confusion and lack of confidence: Beyond making things more expensive, the sales tax--in application and reporting--has thrown monkey wrenches throughout the economy in helter-skelter fashion. The law is so badly-applied that exempt sectors (amongst them services and medicines) are slapped with the sales tax and with so much widespread misapplication, there simply is too much for anybody to do anything about it. And that's assuming that someone wants to, an assumption that lacks any evidence of being true.

3) Increase claims against property insurance: Although the numbers aren't solid, there seems to be the predicted (by Me) trend for more claims of inventory and equipment losses than has been the case in the past four years. My prediction was that inventory and equipment would be sold for cash, then "lost" or "destroyed" to collect the insurance. As of the third quarter of 2007, that trends seems to be bearing up. Note I'm not saying this is right; it isn't. But when faced with small gains or a loss by following the law and a bigger potential gain by committing fraud, the barrier against this action--in all this confusion, too--is lowered, thus making it easier to take the leap.

4) Streamline and perfect the underground economy: As laws to manage or set-up your business continue to pile up, as costs are increased with no true potential for a comparable increase in legal earnings, as confusion and chaos continue to hide any paths to progress, the simple, straightforward and profitable power of the underground economy makes perfect sense. A cash-based, tit-for-tat economy is always preferable to a bureaucratic mishmash of legal entanglements. Or to put it in language the Fools can understand: Cash beats taxes. And the tragic reality of Our economy is that solutions to this simple statement--and they do exist--are beyond the abilities of the Fools to either see, understand or implement.

The Jenius Has Spoken.

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