OT - Politics

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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 currencies.
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.
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Best regards
Han
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I wish these people would find an OT group for their discussions.
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Han wrote:

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.
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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 buy?
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Han
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Han wrote:

The price of oil is a counter. If they price it in euros, dollars, cowrie shells, or gold pressed latinum the price is still the same.
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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$/barrel. See, for instance (watch the wrap) <http://www.praguepost.com/articles/2007/11/21/diesel-prices-hit-a-record - high.php>
That means that if I can get US$ for fewer units of my particular valuta, I am ahead of the game.
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Han wrote:

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 another.
Regardless of the currenty the prices will continue to increase so I don't see what you're so alarmed about.
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see my other reply.
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Han
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Han wrote:

I see no statement in your "other reply" that addresses the price of oil in Europe vs the US.
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wrote:

Point is, oil is priced in US dollars. If you're paying in Euros, when the value of a Euro in US dollars goes up, it costs you less.
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Doug Miller (alphageek at milmac dot com)
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wrote:

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.
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Edwin Pawlowski wrote:

Which has zip all to do with the spot market price of Saudi Arabian Light Crude.
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Han wrote:

Almost 2/3 of the price of European gasoline is tax.
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Han wrote:

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?
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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.
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Charlie Self wrote:

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.
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Charlie Self wrote:

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?
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If you're going to be dumb, you better be tough

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Charlie Self wrote:

Suppose that's true. How would that answer my questions?
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"Dave In Houston"wrote:

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.
The result:
If a flat tax were imposed, the low income memembers of society carry the heaviest tax burden.
Lew
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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 accountants.
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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