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Government making (in)equality pay

Now, in this remarkable shift to Plan B (the rich might flee Plan A) a magnified sales tax will produce perfect equality: you buy, you pay. Except that, of course, consumption-taxing equality just isn't fair: even though wealthy households spend more, on a dollar basis, of their cash flow for groceries and fun, than those in the lower income quintiles, they unforgiveably spend less on a percentage-of-income basis, hence the social-injustice label. And, of course, the upper income quintiles get no approval for saving-and-investing, which, when directed to capital items, increases output productivity and lowers retail prices, or when directed to business expansion, creates new jobs and new taxpayers. Actually, all five income quintiles react similarly to the retail-sales-depressing function of a high sales tax: green-license-plated vehicles ranging from classic Mercedes and brand-new Volvo's to older Chevies and newer Kia's can be seen in the New Hampshire big-box parking acreages. (Caution to river-crossing credit-card wielders: the Tax Department knows who you are and the State Police might visit you.) Economist Arthur Laffer described this Adam Smith inter-relationship between price (including taxes) demand, and supply on a restaurant-napkin sketch of the Laffer Curve, which looks just about like the IQ Bell Curve: zero population at both extremes, the majority in the center, except that the Laffer Curve doesn't display population distribution across an intelligence spectrum; it displays tax revenues across a rate spectrum. When taxes are super-low or super-high, revenues drop to zero for reasons of no collection effort or such intense effort that would-be payers flee elsewhere, and at some median point of moderate taxation is where revenues are maximized because government doesn't forego revenue while the citizenry doesn't avoid the taxed transaction.

(Note to Guv-81 Shumlin: the Laffer Curve shows up, empirically, in taxpayer flight from high-tax jurisdictions: Oregon for income and Vermont for sales.) Gloriosky, Zero, who knew that balancing all these things while governing is, like, really tough?

Long-time Addison County resident Martin Harris now keeps his eye on Vermont from Tennessee.

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