Do I really need to explain it? The value of the dollar vs the euro
started as about 1:1. The euro sank at first to about US$0.87.
Recently, it has risen to US$1.47. These differences in exchange rate
approach a factor of 2. Europe has never been particularly cheap (except
maybe 40 years ago), and now things like simple restaurants are just
plain expensive. The exchange rate is 1 thing.
While for us oil has gone up from $30/barrel, for Europeans it has gone
up less, taking the exchange rates into account. (Indeed, I still do not
understand why European rates for gasoline are close to 3 times what we
pay in New Jersey).
The oil exporters have indeed seen that their revenues have increased
because of their pricing, but they aren't quite getting the bang for
those bucks (US$) anymore if they buy European goods, so they raise the
price some more, or even worse will soon consider pricing inother
If our country's products are going to be cheap compared to European
products, we gain an advantage - our industries will profit from
increased business. But that will drive up prices here in general.
Yes it would be simple, but fair? There has to be a better compromise
somewhere. I doubt that the politicians and accountants/lawyers will go
for it, though. Rhetoric sells votes much better.
Yes, indeed. That's where some kinds of compromise between flat rate and
both extra taxes on some things and tax exemptions on others do indeed
come in. But now, that system has degenerated into giving grants and or
tax breaks to special interests. In other words, the enhancement of the
economy for certain sectors has gone from help for the poor industry to a
give-away. I think the oil industry bonuses and royalty give-aways for
some explorations/productions are an example. With $90/barrel oil, there
should be no need to help the oil companies get richer.
What does the exchange rate have to do with the price of oil?
Are you saying that 30 years ago OPEC charged Europe a different price
from the US? I'd like to see your documentation on that.
It's called "tax", something with which you purport to be familiar.
If they price in dollars or price in Euros the price is the same, it's
only the number that differs. In any case, I fail to see how oil
being priced in dollars benefits the US.
So we're going to be selling more and making more money and that's
going to drive up prices? Why would that be?
The current system is an attempt at that "better compromise". It's
easy to blame it all on the accountants and lawyers but most of the
changes in the tax code have come about because some group or other
made a good case that they were needed to make the code "fair", not
becuase lawyers and accountants lobbied for a windfall profit.
It seems to have escaped your notice that that $90 is what the oil
companies _pay_ for that oil.
If you are the seller and the purchase power of your revenues is going
down, wouldn't you want to raise the price? Or would you be willing to get
paid for your work with money that will only buy 60% of what it used to
If I am in France, and have to buy oil, I have to convert my euros to
dollars and use them to pay whichever country is selling the oil. At
least, as I understand it the world market is priced in US$/barrel. See,
for instance (watch the wrap)
That means that if I can get US$ for fewer units of my particular valuta, I
am ahead of the game.
The world market has to be priced in some currency. If it was priced
in gold presse latinum do you really think that the world would be a
substantially different place? No matter what currency you choose,
the exchange rate is going to fluctuate. In some cases it's going to
be good for one country, in some cases it's going to be good for
Regardless of the currenty the prices will continue to increase so I
don't see what you're so alarmed about.
But as a tourist, we convert to Euros and the price of gas is up in
addition. I paid $6.40 a gallon in April but it was $10 in November. That
is liters converted to gallons and Euros converted to dollars.
This example is overly simplistic to illustrate a simple point. Suppose a 10%
flat tax. A earns $10K a year, B earns $100K, and C earns $1M.
A pays $1,000 in taxes, B pays $10,000, and C pays $100,000. A also qualifies
for many government "entitlement" programs that B and C don't qualify for, which
give C $8,000 in benefits in addition to his $10K wage. Does C get a hundred
times more back in the way of government services and benefits than does A? No,
he doesn't, he's still subsidizing the cost of services and benefits provided to
A. What's unfair about A paying for a fraction of what he gets, rather than
paying nothing at all? What did B or C do that they should be punished by
having their money taken away from them and giving it to A?
Maybe they (B&C here) lived in a country that made it possible for
certain members, with specific advantages, to make 100K or 1,000K,
while A, livingin the same country, but missing the advantages, simply
can't do it? Not won't, as so many of you infer. Can't.
This is also known as the "Improving Outcomes At The Point Of A Gun"
theory. Even if what you say is true, you still have to contend
with the moral question you are conveniently evading: Why is A
more entitled to the time of B & C, and what justifies using the
threat of force (if not actual force) to make them pony up?
One more time: It is NOT virtuous/charitable/honorable/noble/good
to do positive things for one person or group at the expense of
another against their will. This is morally wrong and no amount
of do-gooding tap dance can make it anything else...
P.S. Even if A *cannot* achieve some artificial threshold of
accomplishment you think is "normal", in what universe is
equality of outcomes guaranteed? Setting aside the profoundly
handicapped and children unable to care for themselves, I cannot
see any moral or just reason to "make things more equal" at the
point of a gun.
Tim Daneliuk firstname.lastname@example.org
Maybe if that were the case, this might be worthy of discussion. Since
the topic under discussion is life in the US, then this argument really
doesn't get off the ground. From observation, in most cases, the reason A
can't do more (note, I said, "in most cases". There may be some smaller
subset where this does not apply) is because of poor choices made earlier
in life. So, why should B and C struggle to put themselves into positions
that provide that amount of compensation, working 11 hour days to get there
only to have the government decide that they have "benefited" from life's
lottery and need to provide a "fair amount" of their rewards from society
so that A can have more?
If you're going to be dumb, you better be tough
Probably the most inequitable method of taxation of all.
Low income people must spend the highest percentage of their income to
survive, while the more affluent require a smaller percentage of their
income to survive.
If a flat tax were imposed, the low income memembers of society carry the
heaviest tax burden.
Not completely true. The flat tax proposals usually have an exemption for
the lowest wage earners and even steps for others. What is eliminated is
all deductions. Why it won't pass is simple. You no longer need tax
lawyers and accountants. You won't read about Joe the mailman paying more
taxes than the CEO of a billion dollar corporation with a staff of
Flat tax is something like
Up to $25,000 no tax
25001 to 75,000 7%
75001 to 175,000 9%
175.001 to whatever etc.
No mortgage deductions, no oil drilling credits, offshore assets, no reason
to pay a tax accountant.
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