Any economy, besides explicit taxes, carries on many hidden taxes that people can or have to pay. For example, those countries with excessive tax rate are actually taxing the honesty, because honest people will pay more than those who cheat. Countries with huge crime rate are actually taxing the law obedience, because any connection with criminal activity may improve the citizen cash flow.
In those examples, low taxes and low crime are actually helping the system to be more fair toward good, honest people. U.S.A., thanks democracy, has no significant tax on being a honest person.
Many countries have a tax on age or disability, for example the high inflation rate is wiping out savings, effectively transferring money from old people to younger ones. The high cost of health-care is taxing those who needs medical help. Not visible yet, U.S. has those taxes pending in near future. Believe you or not, there is no way that the Uncle Sam will fulfill his Social Security obligations, those money are already spent on many more interesting things, like wars or taxcuts for riches. The retiring boomers will eat shit and die sick.
All countries have certain tax on stupidity. One example is a lottery and gambling, where stupid people are losing money but smart people do not participate. The U.S., a very effective tax on stupidity is the Wall Street, which constantly transfers money from stupid to smart. In fact, for a smart person is not hard at all to make money on stock market, unlike the lottery, the smart strategy has all the odds to win on regular basis. I should confess, I’m actively playing on stocks for about 10 years and the results are improving every year.
But sometimes the tax on stupidity is amplified by reckless economic policies. Mr. Greenspan was lucky enough to create two bubbles. First bubble burst when Nasdaq fell by 80% from 2000 to 2002. That was a spectacular transfer of money from fools to prudents.
Many fools survived that shipwreck with no money but their houses left and jumped straight into second, real estate bubble. The ghost towns in Florida and a trillion of adjustable mortgages pending for reset are all helping to witness a loads of stupid people floating belly up. For smart people the ongoing crash of real estate is regrettable, but hardly fatal. Moreover, this will help creating opportunities for really smart people.
What this has to do with elections?
In short, the G.O.P. and Bush got their 50% of votes from 5% of the most rich people and 45% of most stupid people. All the brainwashing and garbage coming from Bush mouth, the WMD in Iraq and reckless foreign policies, the tax cuts and intelligent design, “the war on terror” and the war on gays, the policy based on fear and hate are all attracting the most stupid people out there.
And those are exactly the people who will be hurt the most when the real estate prices return back to their 2003 levels. Will they associate their financial losses, defaults and bankruptcies with Bushnomics? They probably will, at least some of them. The big political question is that who will capitalise on hordes of bankrupt fools with ballots. We certainly will see.