I have but one semester of community college but I have been around a while. I have eyes in my head and I can observe. I don’t know what they teach about economics in those big colleges, but one thing I learned by first hand observation is that economies are not static. Things change. Generally they change relatively slowly, but, occasionally, things really take a turn.
I noticed in the early 70s when gas went up, so did everything else. It wasn’t long that the price of meat went up. Then, even the price of soft drinks went up. I was just a sergeant in the Marines at the time and we started making changes in our household economy too. Instead of buying Cokes, we bought Shasta soft drinks (10 cents each, those were the days). Before, we did buy New York steaks every now and then. After, nothing but ground beef. Instead of going only to name brand gas stations, I started going anywhere where I didn’t have to wait an hour in line.
I’m kind of smart. That is to say, I don’t think I was the only one scrimping on things. It was likely that way all over the country, that is except for those who didn’t need to concern themselves with the cost of gas, or milk. There are some folks who bought what they wanted and paid no attention to the price.
Then there were the businesses. I imagine they were cutting corners. Do you know that at one time they had what they called box boys at supermarkets. They sacked your groceries, took them to your car and put them in your trunk. Then, with a smile, they said, “Have a good day.” Nowadays, we all cut corners. Not only do I do all what the box boy did do, but I also scan my groceries too.
It’s actually not that bad. I am getting older and it is getting to be more of a chore, but I manage. It is all so we can save a penny here and nickle there. I save a little. The store saves a little. The one who really suffers is the box boy. They are no longer around. They do pay kids to round up the carts now and then but even they are getting rare. Moreover, they are using those electric things that allow them to do the work of three. They have to pay for the electric things but they only pay the one boy. That not only saves salaries but many other expenses too. Only someone who has run a business can really tell you about all those little expenses that add up to real money.
Corporations, large and small, have expenses too. I have often said, if a person decides to go into business, the first thing he needs to do is hire a lawyer and an accountant. The lawyer might keep you out of jail and that accountant might keep you square with the IRS. You notice I said might. The big corporations pay fortunes on lawyers and sometimes still pay fines. Sears was sued by a guy using a lawnmower as a hedge trimmer. Guess what, Sears lost the suit.
Nowadays, when you buy something, you can’t find the instructions for the cautions and warnings. They are there for the lawyers and the people who like to sue “Deep Pockets.” The legality and the tax laws add millions of dollars to the cost of living every year. It has become part of the economy. The drug manufacturers would have taken years to come up with the vaccines because of all the laws and red tape, but President Trump cut through it all. He kept it safe but he ran a bull dozier though all that was not necessary. Hence, we started giving shots 8 or nine months after he made the decision. Government too, is part of the economy. The bigger it is, the more it costs us all. My question is, if the red tape was not needed, why was it there to begin with, likely for a bunch of bureaucrats — people who are not elected and answer to no one.
Now, Biden wants to raise taxes. It is a common misconception of dems. They think that if they increase taxes ten percent, revenues will go up ten percent. It doesn’t happen that way. Oh, it will for a while. Then people start finding ways around paying the taxes. They hire lawyers to find loopholes and they find have accountants to take advantage of them.
The little guy, the one running the little neighborhood market gets hit with the same taxes and laws, but he has no way to deal with them. So, the little guy pays the taxes and the big guy still avoids them. Hence, the lawyers love increases in taxes. For them, it is job security.
But that is not the end of it. Indeed, it is hardly the beginning. Biden wants billions for the big three auto-makers to start building electric cars. At the same time, he wants to raise corporate taxes. So, the big auto builders will build the electric cars… in Mexico. That way, they get the benefits of the billions from Uncle Sam while avoiding the taxes on their profits.
By the way, did I mention there are many big companies ready to move out of country to avoid the taxes. They likely started packing their bags as soon as they heard the results of the election. If they pay more taxes, it will likely be to some other country, like China. Where did Biden learn his economics?
The sad part is that he will likely never know his tax increase failed to draw the revenues he expected. He likely does not have the cognizance to find out unless someone tells him. And I don’t think anyone will tell him.