One of the seldom discussed advantages of homeownership is the do-it-yourself opportunities it allows. Homeowners can do any of the maintenance and repair chores themselves, while renters pay for it in the cost of their monthly rent.
Homeowners can provide untaxed labor that reduces their need for cash flow and income.
I am unaware that Congress or the state legislatures consider the do-it-yourself effects of their policies and taxes. They seem to do the opposite because the U.S. economy depends on the volume of spending.
To keep the economy going, government would rather pressure us to work like demons and spend like maniacs.
Finding Consumption Without Taxation
During the Great Depression, farmers produced a cash crop for market, but cash earnings were only part of their income. Fruits, vegetables, maple sugar and a high percentage of everything put on the family’s table could be produced on the farm.
Do-it-yourself production does not require a transaction, but it is consumption and supports a family’s standard of living in the same way dollar income production supports consumption.
In today’s economy, we can drop our magazine subscriptions, our cable TV and the health club, but policies like Cash for Clunkers and the first-time homebuyer credit provide help for saving and spenders — not for those out of work and looking for ways to save.
Policies of aid give aid to those with cash to pump up spending.
Property Taxes Force Continued Cash Flow
For the unemployed homeowner or those with periods of unemployment, the pressure to pay property taxes continues without relief. America’s property tax system pressures people to keep their property in use or sell it to someone who will.
If the United States was a country without property taxes, it would give those who owned homes a better opportunity to withdraw from the market place and turn more to do-it-yourself work.
America primarily uses a combination of income taxes, property taxes and sales and use and consumption taxes that demand a relentless tide of cash. As long as our politicians want us to spend our way out of recessions, this is not likely to change.
A tax system that reduces income, payroll and property taxes in exchange for more emphasis on sales and consumption taxes would increase cash flow from wages and permit people to keep more of their interest earnings from saving.
Higher consumption taxes on goods and services raise more revenue from those with the income and preference to spend, but lets others choose more do-it-yourself opportunities.
Trading Time for Taxes
Recently, I was speaking with someone who grew up on a farm in the 1930s. He told me his father was required to grade and maintain the county road that went along their property, as were all the farmers in the district.
Of course, it makes sense with farmers who are short of cash and having the time and equipment to exchange for taxes. It sure beats eviction.
Americans have millions of people short of cash like the hard pressed farmers of the 1930s. America can give them better choices than they have now.
About the author: Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com
