Thursday, August 20, 2009

The Stupid Tax vs. A Tax on the Stupid

There are a couple of taxes that are labeled as stupid, that I would like to elaborate on. They are often confused.

First, is the Stupid Tax. It doesn't matter how much you make or how smart you are, everyone pays the stupid tax. The good think about this tax though, is it does stimulate the economy. Also, it is rarely, if ever, paid to any government entity. Simply put, the Stupid Tax is levied when we spend our money on something that has no value. For example:

1. Buying a new car. Not all of the money you spend on a new car is a Stupid Tax, only about 30-40% of it is.
2. Extended Service Warranties. Probably 95% of extended service warranties are pure Stupid Tax.
3. Premium Gasoline. The extra 10 to 20 cents per gallon is Stupid Tax.
4. Modern Art. 100% Stupid Tax.
5. Starbucks. Probably 50% Stupid Tax, depending on what the prices at Dunkin Donuts are.
6. Those pictures that they take for you at amusement parks. 100% Stupid Tax.
7. Wedding Photographers. Probably closer to 200% Stupid Tax.
8. Checks. 100% Stupid Tax (I'm not even sure why they offer these any more).
9. ATM Fees. 100% Stupid Tax.
10. Bottled water. Depending on where it is bottled 90% (mountain spring) to 99.9% (municipal water supply) Stupid Tax.

On the other hand, taxes on the stupid are those taxes levied by the government on stupid behavior. For instance:
1. Sin taxes. Either quit, or roll and brew your own.
2. Cashing out retirement accounts early.

By far my favorite though is the one that combines both the Stupid Tax and a tax on the stupid. Lotteries! Here we have a system where you chance of winning is about equivalent to being struck by lightning and it is to help the children too! What better way to waste your money.

1 comment:

  1. I think you should write more about the Stupid Tax and stupid taxes. This just wasn't enough.