So, you're a liberal and a Democrat and you disagree with what I've written in the other posts in this blog. Since I don't know you personally, I can only guess about you. Maybe you're a student, union member, government employee or whatever. You think I don't know you and I can't tell you anything about you. Well, welcome to your intervention.
What you may not realize is that I know that, at some level, you understand why you feel compelled to support a philosophy of tyranny of the majority. The simple and obvious motive is greed for power and wealth, but there is an underlying reason that is revealed by the fact that you claim this tyranny is based on "compassion" and "fairness". The true motivation for your philosophy is based in insecurity, specifically, you fear the consequences of being mediocre in a society that rewards the exceptional and outstanding. You've had plenty of evidence in your life that you are not particularly exceptional or outstanding, so you strive to glorify mediocrity. Of course, you'll never agree with that assessment, but the truth of it is reflected in the fact that you choose to be "compassionate" to the mediocre by being malevolent to the outstanding. So I give you the label mediocretin and a definition.
mediocretin: a person whose actions and beliefs promote mediocrity through collectivism
It clearly galls mediocretins that there are people who choose to go about their lives without concern for your opinions and without believing that coerced compassion is truly compassion instead of just coercion. These people are unwilling to accept the slavery that you offer. Some, like me, will just quit working and start breaking the axles of the gravy train that you and your fellow mediocretins have set up. Others will work against you by moving away or investing elsewhere. These people may not be deliberately trying to break your train - they're just going where their Self-interest takes them. You want to believe that you're better than them - more compassionate or even altruistic. The truth is, you're just trying to control them so you can benefit from their productivity or their investment and so that you can feel good about yourself and part of a "holy crusade" while doing so.
Using the government to coerce wealth from those who acquire enough to be less insecure is perfectly acceptable to you because it achieves the dual purpose of wealth redistribution and providing you with the warm and fuzzy feeling of being "all in this together" with lots of mediocre company instead of the terrifying feeling of inadequacy that accompanies being mediocre and all alone in an individualist universe. You want mediocre to feel "normal" so you normalize based on income. Because of this, you feel very threatened by the concept of a system that does not take more from those who have more or make more. You demonize them and wage economic warfare on them and then you complain when they abandon you to your mediocrity. I'm happy enough to keep taking the loot that you pilfer on my behalf, but as you should be able to see, the gravy-train is breaking down, which is something I've planned for. Have you? Wouldn't it be better to live in a society where productivity and investment instead of theft was the source of your security?
Of course, now we have to get around to what to do about this new Self-knowledge. The first thing we have to do is realign your thinking about wealth and those who accumulate it. Many many mediocretins wail about the profits made by "Big Oil" and the high gas pump prices. Save up enough money to buy 100 shares of XOM and your attitude toward oil company profits will soon shift. The good thing is, you don't have to become one of those filthy rich b@stards to take advantage of their gravy train. You can climb on for as little as the price of one share. You see, all this class warfare aimed at investors is just stupid divisiveness, because anybody can become an investor. The hurdles are just not that high. If we were all investors, we could all get along while trying to cut each others' throats in the marketplace. You can turn somebody into an investor by giving them a gift of just one share. Pretty neat, huh?
Of course, if you accept this challenge and buy some shares of XOM, don't be surprised if you start noticing mediocretins trying to make you feel guilty about it while they try to reach deep into your pockets. Mediocretism is a religion that is very much like Catholicism. Both believe in free will tainted with some sort of "Original Sin" which we all must atone for. Pretty slick how they guilt you into subordination of your free will to their collective will, huh? Demonizing corporations and the profit motive is a great way to fill the collection plate, especially when they use the coercive power of government to threaten an even greater loss of freedom if you don't respond well to their shakedown. Who needs Hell when you can use prisons and property seizures?
Of course, as I said before, you're not going to agree with my assessment of you as a mediocretin. It is such a common trait of mediocretins to deny that they are part of the problem, that it draws another parallel to Catholicism. The rank and file of Mediocretism are just like the Catholic "Soldiers of Rome" - strong in faith and weak of mind and at the mercy of their leaders. If you don't believe me, look around at your fellow collectivists. Ask yourself, "is he/she mediocre? - anything more than marginally competent at creating a worthwhile life for his/her Self"? Don't ask this of your favorite politician though. This test is strictly for your peers. Politicians are in a different category. They are like snake-oil salesmen. They are skilled at turning a dishonorable practice - deceiving - into an "honorable" profession. They do not rise to high office by being mediocre at deceiving, so they can fool your senses when you try to judge whether they are mediocre.
The politicians and "community leaders" of Mediocretism are like the Catholic hierarchy. They have two sometimes-conflicting missions. One is to be the keepers of the faith and the other is to keep the gravy train rolling. Usually, that amounts to the same thing, but there are friction points where their purposes cross. They go to great lengths to get you to ignore those. That's what the Original Sin stuff is all about. It focuses you on your guilt so they can keep claiming that the squeaks from the friction are just the work of the devil. Except for the occasional bribery or election fraud scandal, the best example of this phenomenon in Mediocretism is how the keepers of the faith suddenly become very sneaky about trying to attract the devil (investors) into the society when the gravy train begins to break down. They demonize them out of one side of their mouth while offering them a bribe with coerced money out of the other. Catholicism used to openly sell access to heaven to wealthy parishioners who wanted to keep sinning. That was back when they had a monopoly. Modern day Mediocretins now bribe capitalists with tax incentives and promises that they will grease the skids in exchange for jobs. I'm sure that's why they hate competition for governance so much. It's more pleasant to be on the receiving end of bribes/extortion than on the giving end.
This quest for "jobs without profit" is one of those friction areas I mentioned. Mediocre people really don't want real jobs, because real jobs require them to perform to the standards set by the marketplace. That means they must be competitive and mediocre people would rather not be faced with that requirement. When they are consumers, mediocretins love the variety and price pressures that competition provides, but as workers, they see jobs as just a necessary evil to be endured until they reach retirement age where the society will provide them with a comfortable existence and where, if they want more, they can just vote for it. Since they do have to work until retirement, mediocretins want comfortable jobs with lots of benefits, low performance standards and protection from markets. That's one of the reasons they tend to concentrate in government jobs. It's why they unionize and support intrusive legislation to regulate businesses.
So, when you want to test the politicians of Mediocretism, you have to ask yourself, "Are they just telling me what I want to hear?" Of course, you already know that the answer to that is "Yes!" But then you have to ask, "Whose interests are they really looking out for?" That's going to be a very tough question to answer and mediocre people aren't very good at answering tough questions, so they often just point to the politicians on the other side and try to pretend that demonization of the other side is a valid approach to politics. Unfortunately, the truth is that all politicians are really the same species of shark. They just choose to swim on different sides of the boat based on their calculations of which side will result in more and tastier food falling overboard. So the answer to the question is, "Their own interests." For the most part, you have to ignore the precise nature of the sharks and instead focus on the water on both sides of the boat. You want the side where the fishing (or, if you're a vegan, the kelp harvesting) will be better.
To continue with the boat analogy, Mediocretins want to believe that we're all in the same boat - navigating by majority vote. In reality, competent people get off into boats of their own and try to avoid the big boat. Competent people do their own navigating and their own fishing according to their own interests. When the big collectivist mediocretin boat sends out grappling hooks to try to pirate the individualist boats, the individualist can either leave or climb aboard the big boat and then go below the water line and drill holes in the hull. Those are the only rational options available to him.
So, enough of this boat analogy. Back to the question of how to prevent your mediocretin nature from being your downfall. I'm working this like an intervention. I'm deprogramming you so you can see the truth of your nature. The strength to become a competent person has to come from within. You know the steps. Oppose entitlementality, shun or educate those who demonize capitalism, ignore how much other people make or how much they spend, fight your kneejerk impulse to blame others for your shortcomings and finally, recognize that a government that controls your financial well-being is far worse than a government that won't fund your abortion or teach you how to use a condom. If you think that's an unfair slap at your politics, ask yourself whether you would stick with the party of entitlementalism if they slipped a pro-life or pro-SUV plank into the platform. If the answer is yes, then you're a mediocretin and if the answer is no, but you still support the party of entitlementalism without those planks, then you're still a mediocretin.
Saturday, January 19, 2008
Wednesday, January 16, 2008
Go Bold or Stay Behind
You might be asking, "Why should Michigan become the only state that says 'No!' to the taxation of businesses?". When Michigan scrapped its Single Business Tax, it was on its way to becoming that. Our state government seems to be obsessed with where Michigan falls compared to other states on the many lists of 50 that are generated. When they realized that failing to replace the SBT with other business taxes would put Michigan at the bottom of the list of tax revenues from businesses, they freaked out. They did not analyze whether that would be good or bad for the society of Michigan. They did not analyze whether that would help the society of Michigan to become more economically competitive. You can make all kinds of guesses as to why they were concerned with dropping to the bottom of the list of business tax revenues, but since they didn't do the analysis that matters most - the analysis of what impact it would have on the viability of Michigan's economy - it really doesn't matter why. What matters is what we can do to get them to refocus on what really matters.
Our Governor has sent out her spinners to point out that Michigan is "in the mainstream" on many tax and spending policies, as if where we are relative to other states on those policies is more important than where we are relative to other states on economic growth, unemployment, population migration and other measures of economic viability. Those measures scream the message that Michigan is failing to compete and is adversely impacting the economy of the entire US as a result. Apparently, the fact that we are in a leaky boat with nobody rowing and with the rudder stuck in the hard'a'port position is less significant to people in Lansing than the fact that our control policies position us in the middle of the pack.
This does not bode well for economic recovery and this is why we have to resort to the most powerful check on government power. That check is investor power. If investors say "No!" to the enablement of productivity, there will be no productivity and government power will evaporate as the productive members of our society head for greener pastures leaving only the people who sit like baby birds with wide open mouths - waiting for mama bird to stuff something fat and juicy in. When there is no longer anything fat and juicy to stuff in, the importance of paying attention to economic fundamentals will become more clear. The most important economic fundamental is that investors have power and they will exercise that power elsewhere if the potential for reward is limited by government over-control.
So back to the original question, "Why should Michigan become the only state that says 'No!' to the taxation of businesses?". Let's rephrase that question. "Why should investors help Michigan to become the first state in the modern era to say 'No!' to taxation of capital?" There are several answers to that, but the most important is that it will be in the best interests of everyone in the world. We all benefit from competition. It helps us to be better prepared for whatever the future brings.
Sooner or later, some state will find its economy in trouble and will recognize that it needs to help its businesses become more competitive. Furthermore, eventually one of these will recognize that broad-based reform works better than government managed pick-and-choose sweetheart deals for targeted businesses. Finally the success of those reforms will cause the other states to go down the same road. Michigan is in the position that Ireland was in within the European Union when Ireland chose to drastically cut corporate income taxation. The result in Ireland was called, "the Irish Miracle".
Michigan is in the position that British Columbia was in when socialists came to power there and caused an economic collapse. BC's response was broad-based tax and spending cuts that put more money in the hands of both investors and consumers in BC. BC's economy turned around quickly.
Michigan is in a position to draw the logical conclusion from those two examples and leapfrog to the bottom of the business tax revenue list and to the top of the economic opportunity list. We just need help from investors to push us to the logical conclusion. Boycotting Michigan's misguided government control of capital is easy and in your long term best interest as well as ours.
So, hold onto your investment dollars or put them to use in places where they will not be subject to confiscation at the whims of the people who are addicted to the belief that they deserve a share of the profits without a share of the risks. You will know that the time has arrived when there is capitulation by the voters of Michigan. It won't be sufficient for Michigan to become a right-to-work state or to spend more on education or to offer you a sweetheart deal on future taxes. Michigan needs broad-based tax reform that takes the target off the backs of investors and workers. When the Constitution of the State of Michigan has a clause that says "Hands off the capital", then Michigan will be the place where your money will do us and you the most good.
Our Governor has sent out her spinners to point out that Michigan is "in the mainstream" on many tax and spending policies, as if where we are relative to other states on those policies is more important than where we are relative to other states on economic growth, unemployment, population migration and other measures of economic viability. Those measures scream the message that Michigan is failing to compete and is adversely impacting the economy of the entire US as a result. Apparently, the fact that we are in a leaky boat with nobody rowing and with the rudder stuck in the hard'a'port position is less significant to people in Lansing than the fact that our control policies position us in the middle of the pack.
This does not bode well for economic recovery and this is why we have to resort to the most powerful check on government power. That check is investor power. If investors say "No!" to the enablement of productivity, there will be no productivity and government power will evaporate as the productive members of our society head for greener pastures leaving only the people who sit like baby birds with wide open mouths - waiting for mama bird to stuff something fat and juicy in. When there is no longer anything fat and juicy to stuff in, the importance of paying attention to economic fundamentals will become more clear. The most important economic fundamental is that investors have power and they will exercise that power elsewhere if the potential for reward is limited by government over-control.
So back to the original question, "Why should Michigan become the only state that says 'No!' to the taxation of businesses?". Let's rephrase that question. "Why should investors help Michigan to become the first state in the modern era to say 'No!' to taxation of capital?" There are several answers to that, but the most important is that it will be in the best interests of everyone in the world. We all benefit from competition. It helps us to be better prepared for whatever the future brings.
Sooner or later, some state will find its economy in trouble and will recognize that it needs to help its businesses become more competitive. Furthermore, eventually one of these will recognize that broad-based reform works better than government managed pick-and-choose sweetheart deals for targeted businesses. Finally the success of those reforms will cause the other states to go down the same road. Michigan is in the position that Ireland was in within the European Union when Ireland chose to drastically cut corporate income taxation. The result in Ireland was called, "the Irish Miracle".
Michigan is in the position that British Columbia was in when socialists came to power there and caused an economic collapse. BC's response was broad-based tax and spending cuts that put more money in the hands of both investors and consumers in BC. BC's economy turned around quickly.
Michigan is in a position to draw the logical conclusion from those two examples and leapfrog to the bottom of the business tax revenue list and to the top of the economic opportunity list. We just need help from investors to push us to the logical conclusion. Boycotting Michigan's misguided government control of capital is easy and in your long term best interest as well as ours.
So, hold onto your investment dollars or put them to use in places where they will not be subject to confiscation at the whims of the people who are addicted to the belief that they deserve a share of the profits without a share of the risks. You will know that the time has arrived when there is capitulation by the voters of Michigan. It won't be sufficient for Michigan to become a right-to-work state or to spend more on education or to offer you a sweetheart deal on future taxes. Michigan needs broad-based tax reform that takes the target off the backs of investors and workers. When the Constitution of the State of Michigan has a clause that says "Hands off the capital", then Michigan will be the place where your money will do us and you the most good.
Thursday, October 25, 2007
Don't Be A Sugar Daddy
Let me say that I have nothing personal against Jeff Daniels. He's a fine and I believe underrated actor. But, when you see him doing commercials suggesting that Michigan is a good place to invest, he's simply mistaken. I know that the Michigan government will offer you all kinds of sweetheart deals to get you to invest your capital here and if you're here and you threaten to leave, they might offer those same deals as incentive to stay. But, really think about that. Anyplace where the government thinks it is okay to manage the mix of businesses is a place where your business could become out-of-favor every 2 or 4 years and unless those sweetheart deals last well into the future, your company or your industry will eventually be footing the bill for the current crop of favored sons.
What Michigan needs is to be out of the business of saying which businesses are favored and which aren't. If they give a tax break to you, they may fund it by targeting your suppliers, your customers, your labor force, your funding sources or your insurers. If any of those happen (and that's how they fund those sweetheart deals) any competitive edge you might receive is just an illusion. They are just like the prostitutes who hope to find a sugar daddy or a small set of sugar daddies so they can live comfortably or even richly with less whoring.
Michigan is either just the latest or is in the vanguard of states going down the tubes due to overmanagement of their business climate. The people of Michigan, taken as a class, are so economically naive that they have a knee jerk reaction of taxing the guy behind the tree whenever they want more from government. The guy behind the tree is the owner of the forest or the investor who bought the timber rights. If you hold off for a few years, you will witness an economic death spiral. A combination of direct taxes, stealth taxes, hidden taxes, targeted spending cuts, senseless spending increases and sweetheart deals will keep shrinking the tax revenues by crippling Michigan's economy, which will cause those who are unwilling to quit overmanaging to go into another round of taxing and cutting and distorting the incentives for investment. Eventually, there will either be gut wrenching tax reform or we will reach a new equilibrium with a much smaller economy, a much smaller population, and much smaller rewards for the risks you as an investor will be taking. Buying in right now could be a big mistake.
So how can Michigan get out of this mess? By addressing the fact that the only thing that can truly be taxed is productivity. Capital is not productivity. Productivity can only be directly taxed at the point where the worker is paid for his productivity or at the point where the end consumer buys his productivity. That means taxation of wages and salaries or consumption are the only direct taxes of the productivity, the source of all societal benefits. Assuming the tax reform route is finally taken, drastic cuts in the taxation of businesses will be required. The only way those are likely to be sold to the voters is as part of a package to shift taxation away from all income. The people of Michigan are simply incapable of grasping the difference between taxing production and taxing business income (capital). Capital is an enabler of production just as government is an enabler of production. Taxing capital is as counterproductive as taxing government. Taxing either diminishes their ability to enable production.
So, don't expect any end to the taxation of business income or business property to occur without an end to taxation of personal income. Pretty much all that leaves to tax is consumption and it will be very hard to convince the voters that business consumption is not the same as personal consumption, but in order for a consumption tax as a replacement to income taxes to do any good, business consumption must be exempt from the tax. The most well-known example of this type of taxation is called the FairTax, which has not yet been tried by any state or country. Michigan's economic collapse is imminent and this makes it a prime candidate for accepting the risk of this shift in taxation ideology to consumer/voter consumption.
Consumption taxation is productivity taxation at the consumer end. Productivity consumption used to enable more productivity (business consumption) must be exempt from taxation because taxation of the enablers of productivity is counterproductive. It would be easy to make the case that any kind of taxation discurages production, but one thing that is undeniable is that life demands that people consume. We can discourage investment and discourage income through taxation and thus damage our economy or we can tax consumption and thus encourage investment, saving, income growth and the economy boost that those create.
Taxing consumption discourages excessive consumption. Will that hurt your business more than taxing your profits? your suppliers? your labor's income? That might very well be a question with no clear answer, but making the cost of government painfully clear to the voters as a line on their receipts - instead of hiding the price of government in the cost of your products - will help the voters to be that much more conscientious of the consequences of letting the government grow. Even if all else equalized, that one benefit would help your products be more competitive, because Michigan's society would be the one with the least managed, most market-driven markets.
What Michigan needs is to be out of the business of saying which businesses are favored and which aren't. If they give a tax break to you, they may fund it by targeting your suppliers, your customers, your labor force, your funding sources or your insurers. If any of those happen (and that's how they fund those sweetheart deals) any competitive edge you might receive is just an illusion. They are just like the prostitutes who hope to find a sugar daddy or a small set of sugar daddies so they can live comfortably or even richly with less whoring.
Michigan is either just the latest or is in the vanguard of states going down the tubes due to overmanagement of their business climate. The people of Michigan, taken as a class, are so economically naive that they have a knee jerk reaction of taxing the guy behind the tree whenever they want more from government. The guy behind the tree is the owner of the forest or the investor who bought the timber rights. If you hold off for a few years, you will witness an economic death spiral. A combination of direct taxes, stealth taxes, hidden taxes, targeted spending cuts, senseless spending increases and sweetheart deals will keep shrinking the tax revenues by crippling Michigan's economy, which will cause those who are unwilling to quit overmanaging to go into another round of taxing and cutting and distorting the incentives for investment. Eventually, there will either be gut wrenching tax reform or we will reach a new equilibrium with a much smaller economy, a much smaller population, and much smaller rewards for the risks you as an investor will be taking. Buying in right now could be a big mistake.
So how can Michigan get out of this mess? By addressing the fact that the only thing that can truly be taxed is productivity. Capital is not productivity. Productivity can only be directly taxed at the point where the worker is paid for his productivity or at the point where the end consumer buys his productivity. That means taxation of wages and salaries or consumption are the only direct taxes of the productivity, the source of all societal benefits. Assuming the tax reform route is finally taken, drastic cuts in the taxation of businesses will be required. The only way those are likely to be sold to the voters is as part of a package to shift taxation away from all income. The people of Michigan are simply incapable of grasping the difference between taxing production and taxing business income (capital). Capital is an enabler of production just as government is an enabler of production. Taxing capital is as counterproductive as taxing government. Taxing either diminishes their ability to enable production.
So, don't expect any end to the taxation of business income or business property to occur without an end to taxation of personal income. Pretty much all that leaves to tax is consumption and it will be very hard to convince the voters that business consumption is not the same as personal consumption, but in order for a consumption tax as a replacement to income taxes to do any good, business consumption must be exempt from the tax. The most well-known example of this type of taxation is called the FairTax, which has not yet been tried by any state or country. Michigan's economic collapse is imminent and this makes it a prime candidate for accepting the risk of this shift in taxation ideology to consumer/voter consumption.
Consumption taxation is productivity taxation at the consumer end. Productivity consumption used to enable more productivity (business consumption) must be exempt from taxation because taxation of the enablers of productivity is counterproductive. It would be easy to make the case that any kind of taxation discurages production, but one thing that is undeniable is that life demands that people consume. We can discourage investment and discourage income through taxation and thus damage our economy or we can tax consumption and thus encourage investment, saving, income growth and the economy boost that those create.
Taxing consumption discourages excessive consumption. Will that hurt your business more than taxing your profits? your suppliers? your labor's income? That might very well be a question with no clear answer, but making the cost of government painfully clear to the voters as a line on their receipts - instead of hiding the price of government in the cost of your products - will help the voters to be that much more conscientious of the consequences of letting the government grow. Even if all else equalized, that one benefit would help your products be more competitive, because Michigan's society would be the one with the least managed, most market-driven markets.
Sunday, October 7, 2007
Why say "No!" to Michigan
The purpose of this blog is to explain why businesses should avoid moving to Michigan or expand within Michigan until House Joint Resolution L or some other serious tax reform package that takes the tax target away from businesses is passed by the legislature and approved by the electorate. Don't get me wrong. If you are reasonably sure you can make a profit here, don't let me get in your way. Just hear me out. Michigan is on the ropes and we have a chance to send the socialists who've destroyed our economy packing. We suffer from a very extreme case of entitle-mentality and it has caused us to become the laughingstock of the US. Our government couldn't find their own ass with a mirror, binoculars and a 'Kick Me' sign. They had a chance to take the right road when they got rid of the Single Business Tax, but Governor Grandstand couldn't stop talking about what new business tax we would replace it with, so businesses wisely took a wait and see attitude toward Michigan, which killed any chance of progress for a few years, but helped send us down the road to tax reform. Unfortunately, the gutless cowards in Lansing could not say "No!" to the portion of voters who are addicted to the sugar-coated turds that the socialists have been spoon feeding to them for over five decades. The wimps in Lansing passed the new Michigan Business Tax and it guarantees that things will get much worse until we become Hollowigan or possibly Michiganissippi. Then we will finally have a chance for the tax reform we need and then will be the time for you to pounce and invest your capital in our economy.
What must happen is this. We must lose enough jobs and enough people that we can't possibly balance a state budget without big pain for the remaining few. Then, House Joint Resolution L, which is essentially a FairTax proposal would scrap all income taxation and business personal property taxation in favor of a consumption tax on goods and services sold within Michigan. This will make products made in Michigan much more competitive inside Michigan and in markets outside of Michigan, because the high cost of Michigan's entitlementality will no longer be buried in the cost of our products. Michigan is uniquely situated for success with this approach, because the majority of our borders are lakeshore, with an international barrier on the East and North and with rural counties of low population density on the land borders.
For this reform to occur, Michigan must first wrestle the political power within the state away from the socialists and those who are addicted to the their policies. This means we must lose not just union members, but retired former union members who voted themselves a huge income tax exclusion of up to $80K per couple for pensions and other forms of retirement income. As it is right now, we have just received an income tax increase and new services added have been added to fund the sales tax pool. The projections are that these increases plus budget cuts that are currently being hammered out will balance our budget, but given the trends - decreasing population, rising unemployment and plummeting property values - these projections are rosy at best and likely to be a case of putting the cart beside the horse so that the horse will walk around in circles until it dies. That will be when sanity will have a chance to assert itself in Lansing and if/when that happens, that will be when your capital will help provide the economic miracle we need. Resolution L is currently languishing in Lansing, waiting for the politicians to grow guts or for the electorate to give them permission to focus on the societal imperative of enabling productivity.
I know this seems too simplistic, but I intend to write more later on how and why it would work and also how and why it will be the right thing for the people of Michigan and the investors who are willing to take a risk on the productivity of our society. In the meantime, if you see negative comments about this blog, please consider the possibility that they are signs of a malady which should be called Sugar-Coated Turd Withdrawal (SCTW).
What must happen is this. We must lose enough jobs and enough people that we can't possibly balance a state budget without big pain for the remaining few. Then, House Joint Resolution L, which is essentially a FairTax proposal would scrap all income taxation and business personal property taxation in favor of a consumption tax on goods and services sold within Michigan. This will make products made in Michigan much more competitive inside Michigan and in markets outside of Michigan, because the high cost of Michigan's entitlementality will no longer be buried in the cost of our products. Michigan is uniquely situated for success with this approach, because the majority of our borders are lakeshore, with an international barrier on the East and North and with rural counties of low population density on the land borders.
For this reform to occur, Michigan must first wrestle the political power within the state away from the socialists and those who are addicted to the their policies. This means we must lose not just union members, but retired former union members who voted themselves a huge income tax exclusion of up to $80K per couple for pensions and other forms of retirement income. As it is right now, we have just received an income tax increase and new services added have been added to fund the sales tax pool. The projections are that these increases plus budget cuts that are currently being hammered out will balance our budget, but given the trends - decreasing population, rising unemployment and plummeting property values - these projections are rosy at best and likely to be a case of putting the cart beside the horse so that the horse will walk around in circles until it dies. That will be when sanity will have a chance to assert itself in Lansing and if/when that happens, that will be when your capital will help provide the economic miracle we need. Resolution L is currently languishing in Lansing, waiting for the politicians to grow guts or for the electorate to give them permission to focus on the societal imperative of enabling productivity.
I know this seems too simplistic, but I intend to write more later on how and why it would work and also how and why it will be the right thing for the people of Michigan and the investors who are willing to take a risk on the productivity of our society. In the meantime, if you see negative comments about this blog, please consider the possibility that they are signs of a malady which should be called Sugar-Coated Turd Withdrawal (SCTW).
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