Reflection on Tax Bases

There are three different types of tax bases: proportional tax, progressive tax, and regressive tax. With a proportional tax, everyone would pay the same tax percentage. With a progressive tax, those who earn less money would pay a smaller percentage for their taxes while those who earn more would pay a higher percentage for their taxes. On the other hand, with a regressive tax, those who earn less have to pay a higher percentage while those who earn more get to pay a smaller percentage.
The town of Weserville took the concept of these tax bases and had sample groups of people from the town each pay taxes with the different types of tax bases. The class learned that some tax bases are more fair than other, although many people still felt differently over which one was the most fair. When there was a proportional tax, people were slightly irritated that the tax did not make much of a dent in the money of the rich. When there was a progressive tax, the poor were happier, but the rich were a little unhappy they needed to pay more.  The citizens of Weserville were pretty upset when there was a regressive tax because the poor were almost broke and the rich barely felt the tax.
I flat out think that the regressive tax is completely unfair because the poor have to give more money that means more to them than the rich. The rich have more money overall to give so even if they are paying more, they are not giving money that mean as much to them as the poor. I personally am torn because the proportional tax is more fair to the rich and not completely unreasonable with everyone paying the same tax percentage. I also think that the progressive tax is fair because it helps the poor more and also provides more money by taking a greater percentage from those who have more to give. The tax bases are very different, but I think it can be clearly seen that the regressive tax is far more unfair than the proportional and progressive tax.

                                                                   Works Cited

"Lower Mac News & Issues." Lower Mac News Issues. N.p., n.d. Web. 27 Feb. 2014.

Don’t Sell Cheap U.S. Coal to Asia

http://www.nytimes.com/2014/02/13/opinion/dont-sell-cheap-us-coal-to-asia.html?ref=economy


In this article from The New York Times, the issue of selling coal that is being subsidized to Asia is confronted. Cherry Point, near Seattle, Washington, is being used by corporations to build a terminal that will "export nearly 50 million metric tons of coal to Asia annually." The business will provide jobs, but at a cost. There would be an increase in pollution as a direct result and on a national level, there are problems because the land that the government is leasing to the corporations is valuable. The government is leasing out land for corporations that are not even seeking out the American buyer, but instead China, Japan, and Korea. These countries will be able to produce more with the increase in coal imports, but the U.S. benefits little because these corporations are giving so little back to the federal government. Taxpayers are losing out because the government is charging so little for the corporations to use valuable coal strips. The issue of pollution is also heated and an effort to use clean energy is strongly debated. Asia really wants any coal they can have and they do not care about the negative effects of pollution. The article thinks a good first step is "a moratorium on new coal leases."
I think two things on this subject. I believe that the government should not be leasing the land for corporations to mine coal so cheaply. The taxpayers are not being treated fairly in this way. The government is firstly leasing the land cheaply and they are spending tax dollars to subsidize the mining. This is not fair because the government is wasting money on a business that will not benefit U.S. citizens. Only the corporations will see any real profit from the coal.  For these reasons I support the government making the cost for the corporations using federal lands for private use higher. Another issue that I feel strongly about is the pollution. I think that Asia needs to work on their pollution regulations because they are ruining air quality for everyone. Asia has to find clean energy and promote that more. The reduction of the burning coal would improve the issue of pollution that Asia finds itself in right now.
I think this will be another step to molding how businesses and governments work together. Neither side should cave to another and should have a firm position. They should compromise and be fair to each other or else there will be situations such as this one in which the corporations are getting the better deal. I think this will also affect future positions on pollution policies in government. If governments continue to disregard the effects of their decisions on the environment, they will run into some serious problems. I think that selling cheap coal to Asia needs to be fixed and a new solution should be found, for example increasing the cost of leases to use the federal land for coal mining.

Reflection on Capitalism and Incentives

This week in Personal Finance we discussed capitalism and the different fundamentals of a market economy. The first central fundamental of capitalism is private property which means that everyone is free to have their own property. There are other fundamentals such as specialization so people can focus their efforts on jobs they are best at and consumer sovereignty which allows people to choose what they want to buy. There is also competition to keep prices fair and deals better. Voluntary exchange has two parties enter into a contract where they both work for their mutual benefit. Limited government involvement allows these fundamentals to work freely. The fundamentals of a market economy provide the right conditions for capitalism to thrive. The success of capitalism could not be possible without incentives.
We learned that incentives drive people to work for the success that a free market economy has the potential to produce. An incentive is anything that enables or motivates a particular course of action. Incentives motivate the people in a market economy to work hard for all that they own. People have to work for the profit motive which is all the money people make after all the expenses have been paid. Producers really work for a profit and consumers help them achieve this when they purchase goods and services.
I think that incentives are a highly effective method of producing a productive economy. People work best when they have something to look forward too. This system encourages people to work in their own self-interest, but also causes the economy to grow as well. No progress could be made if people did not have an incentive to improve. This is why capitalism with its fundamental system of incentives is successful. In our class, we can use this knowledge to understand the market economy's different parts better.

Reflection on Marx vs. Smith

This past week we have studied the different economies and the main thinkers behind the concepts of the economies. A traditional economy is one in which families, clans, and tribes make decisions in favor of what would benefit everyone as a whole. A command economy is one in which the government has control over the factors of production. A market economy is one in which individuals have control over decisions made in the economy and they have private property. This economy is run by producers and consumers. We discussed the differences between Adam Smith who was a proponent of a market economy and Karl Marx who was a proponent of a command economy. The class went over the pros and cons that come with the economy that a country chooses and I definitely think that a market economy is the best choice.
When Weserville had Marx and Smith visit the class for lunch, we could see that they had differing opinions, but they agreed on some things. One of the matters they agreed upon is that a nation needs to have an economy. The details of their ideas for an economy is where they started to have issues. Marx believed in socialism and wanted equality among the people. He thought that all the goods should be distributed evenly among everyone to get rid of the different classes in society. Marx believed that capitalism was enslaving the working class in a system of wage slavery and thought that a command type of economy was the solution. 
Smith thought there was another solution. He argued in favor of a market economy on the basis that he thought there was an invisible hand guiding the economy. He believed that when people make decisions to help themselves they are also going to help others. Smith was of the position that a market economy would benefit the people most.
I think that Smith was correct mostly. They both have excellent points, but a command economy has proven to never be successful in countries such as Russia and Cuba. Countries with very successful economies are ones with market economies like the U.S. and Canada. Although these countries have mixed economies, they certainly resemble a market economy more so than a command economy. I agree with Smith on the point that people should have more freedom to make their own decisions so that they have more incentive to work harder. People will not work as hard if they will not see all the fruits of their labor. Smith had the right idea with capitalism and free enterprise, but I do think that it is necessary to have regulation in an economy with the government overseeing that the economy does not totally become unfair to certain social classes in the economy.
These two stands are so important to understand today. Many countries are making the transition from a command economy to a market economy like Iran and China. People need to differentiate the ideas that each of the economies support so that they can know what to do in forming a new economy for their country. A market economy offers the progress that a command economy does not because it pushes people and businesses to make better goods and services for consumers through competition. In all, a market economy trumps a command economy and should be implemented in all countries.

Works Cited

"Whispering." : Adam Smith vs Karl Marx in Egypt. N.p., n.d. Web. 06 Feb. 2014.

Sample Post

Ani Clem is really excited to be posting this blog.

But I am really tired.

Works Cited

"Bunny in Office Gif - Google Search." Bunny in Office Gif - Google Search. N.p., n.d. Web. 04 Feb. 2014.