I've said this before.

As a matter of fact I've said it since I started blogging in 2004 and many times since, but now that we actually have a President that seems to think he can defy an economic law as old as money, it seems a good time to recall the lesson.

Let me preface by saying whether you think the government should provide universal health care or not--you will pay for it out of your own pocket. The idea that the 'rich' should or will pay is just so much crap politicians tell you to get you to vote for their pie-in-the-sky programs.

Who wouldn't want free healthcare? A free education? Free housing? Free is good, isn't it? The irony is that the same people telling you that we can save money if we adopt single-payer, universal or socialized medicine (so many names for the same thing--what are they trying to hide?), tell you that there is no free lunch when it comes to the environment.

Seems like a contradiction doesn't it?

That depends on how you look at it. The commonality between all these propositions is that you pay, and the government collects, expanding the pool of government workers, and thus dependency of the political party that promises to preserve and expand the job, program or pension you completely rely on. You want an example? Social Security. This program will make us all paupers, but Democrat defend it like Jerusalem because they can scare seniors in every election cycle by saying, "the Republicans are going to take away your social security..."

Say you accept that as relatively harmless, you still have a problem--who pays?

This is where some marketing background can come in handy. Every business and every government has to think about how it collects its money. Why do you think the gas company, the electrical utility and just about everyone else wants your credit card on file so they can charge you automatically?

Dude--its not for your convenience, its for theirs. They get consistent, predictable cash flow, and for that advantage they are willing to pay the credit card companies 2-3% of the take. Entire business sectors exist to do nothing but smooth out business cash flows and make a handsome profit doing it.

So how does this relate to the government and taxes? The government has the same problem as any business does--its budgets and outlays depend on predictable and consistent cash flows. Thousands of people with PhDs are toiling away at this very minute figuring out the best mix of taxes to insure that steady cashflow. Property taxes? Good stuff, because its not going anywhere. You can tax the hell out of it and be assured of getting the money on time because the mortgage company takes care of it for you. There are limits though--too high and you create more problems than you solve, but its an attractive tax because it exploits the illiquid nature of real estate. Sales tax and income tax are similarly easy taxes to collect because private companies essentially do it for you, but receipts rise and fall with the economy, so while its an efficient tax, its suffers from unpredictability. Then there are questions about how you tax businesses--too high and they relocate to more favorable tax climes, and with it go a good chunk of property taxes, sales and income tax as well. Too low and you're leaving money on the table.

Rich people are even more problematic than factories.

The great thing about being rich is not the spending, its the flexibility. Steve Jobs makes a dollar a year at Apple. What do you think he pays in income taxes? Nada.

On the other hand, Apple does provide him with a private jet, pays for its maintenance and fuel. How much tax do you think he pays for that bennie?

Can you tax Apple? I suppose you could try, but understand that Apple is a multi-national. At some point their accountants look at the costs versus the benefits of staying in California and decide Canada is a better base of operations. How excited do you think the Canadians will be? This isn't the mid-twentieth century where you had captive industries ripe for the plucking. This week I'll be working in California, Hawaii, Texas and Illinois and I'll never leave my house. We live in a age where location has become meaningless, but where it means everything to tax regimes.

Rich people aren't going to stand around and let Democrats rape and pillage their estates, and among the first rich people to protect themselves are going to be Democrat officials like Al Gore and John Kerry.

Still, Obama will have already spent the money, and the taxes will need to be collected. But from whom you ask?

Look in the mirror. Do you get a paycheck every two weeks? Do you have a mortage? Can you quit your job tomorrow? Yes, Yes and No? You are so screwed. You are the logical target of Obama's tax collectors, and sadly, you always were. There is absolutely no chance that the bright boys in the Obama administration don't know that they can't tax the rich to pay for their spending regime. You were always the patsy.

You know what's really great? No for you of course, but for the Democrats. In the coming poverty, higher education will be almost the only way to escape genteel poverty. Well guess who controls all the institutes of higher learning? Yeah, that's right. You will be sending your children and grandchildren to 'them' for reeducation and integration into the new order. Your own children will become your oppressors.

Dan Riehl get it...

That Obama sure is a clever guy.