[XBob]

64 - "That number of 15% is true if you only look at the top tier of manufacturing for a product. That 15% is cascaded throughout the whole process of a product from the harvesting of the raw materials all the way up the stream through processing, shipping, manufacturing, marketing, distributing the finished goods, etc."

Excellent observation.

About 4 years ago, I did some work on our income tax system, and figured out that our true tax rate comes out to about 81% in the US, when you cascade it through the system, and apply the taxes on taxes on taxes at every level, just as you have figured out. And this was just income tax.

Unfortunately, a hard drive crash lost all my work.

And about 15 years ago my brother and another engineer did an analysis on our local unincorporated town and taxes and what it would cost to incorporate in additional taxes. They came up with this very interesting thing, (not unlike Alaska, where the state gives money back to every citizen every year rather than collecting taxes),

Anyway they figured out that if we collected/paid full taxes in for two years, without any spending (not hiring any personnel,etc), and invested the taxes, we could start hiring personnel slowly after the third year, and after 5 years, be up to full city government, and cancel all taxes, leaving the investments to pay for it.

[gooleyman]

About 4 years ago, I did some work on our income tax system, and figured out that our true tax rate comes out to about 81% in the US, when you cascade it through the system, and apply the taxes on taxes on taxes at every level, just as you have figured out. And this was just income tax.

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Excellent. And that is why even a small increase in the income tax rate produces such a large swing in the prices of the goods and services we use everyday. I wondered about this years ago and like you, I sat down and put pencil to paper (there was no such thing as a personal computer with a hard drive back then) and figured out that the tax rate doesn't only affect the last level we see, but it cascades like you discussed. Conversely, that is why a small "decrease" in tax rates like George Bush just did creates such a large swing as we are seeing in the economy right now. I didn't expect to see the result in the economy as quickly as we have, but it makes sense now based on your and my calculations discussed here.

Could you imagine the surge we'd see if income taxes were REALLY cut....let's say, slashed in HALF....WOW!!! There'd be so many plants moved back stateside, our heads would spin like tops. Plus we'd shut up all these manufacturing-jobs-are-leaving-because-of-NAFTA-and-GATT people. I'd like to see that.

Problem is: Liberals of either parties won't let that happen. Heck, my own RINO Senator Voinovich (Ohio) forced the Republicans to scale back the last tax cut we had. With friends like him the DemocRATS jobs are just that much easier.