The Lit Fuse – Page 2 – Where we are going, and why.

The United States of Insolvency, part 1: Introduction

Dec 272012

Insolvent: adjective 1: unable to pay debts as they fall due 2: having liabilities greater than the market value of assets held The United States government has racked up massive debt by spending far more than its revenues. Like a person with a limited income and bills to pay, if the debt grows large enough, the government will be unable to pay the interest on the debt and will therefore be insolvent. This series of posts addresses these questions: What is the deficit? What is the national debt? What are our unfunded liabilities? Why is the debt a serious problem? What happens if the United States does become insolvent? Is […]

What is Progressive Taxation?

Financial No Responses »

Dec 262012

Sales tax is, in most cases, a proportional or flat tax. For example, in Massachusetts, the sales tax rate is 6.25% on taxable transactions. It does not matter if you purchase a $5 item such as a hockey puck or a $25,000 item such as a car; the rate is the same, and the tax increases in proportion to the price. In the United States, the Federal income tax is called progressive. The term seems to indicate that it is a positive thing, but the word progressive means that the tax rates progress, or move higher, as income increases. For example, in 2012, single taxpayer incomes up to $8,700 are […]

Who Pays?

Financial 3 Responses »

Dec 262012

I hear a lot of grumbling about taxes, most especially about people and business paying their “fair share”. It is important to know who is paying taxes, and how much. Some of those numbers are easy to come by, some are hard, and some are impossible to even estimate. Let’s focus on who pays US Federal income taxes and how much they pay, since those are the easiest numbers to get. The best place to go for US Federal income tax statistics is the IRS, as income tax returns are the best source of accurate information. Unfortunately, the IRS has not posted much information since 2009, and complete information on […]

In Defense of Capitalism

Sociopolitical No Responses »

Dec 202012

Capitalism is the reason for our prosperity. Yet today, it is under attack for various reasons. Since I very strongly believe in capitalism, I’ve had some very strong arguments with people who have disparaged it. Usually I start by addressing whether they understand what capitalism actually is, because sometimes they are confusing it with something else such as oligarchy, or attaching things to it that do not belong. If I determine that they do, in fact, understand what it is, then I move on to asking them what they’d replace it with. Wikipedia has some excellent wording for these, so let me use theirs: Capitalism is an economic system…There is […]

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