k_colomba

http://www.nytimes.com/2008/11/16/nyregion/westchester/16evalwe.html?scp=5&sq=tax&st=cse

This is good little article that looks at how city-specific tax structure can really affect individuals. Now that the course is all wrapped up (and the  hefty amount of studying on taxes) I can see a lot of class examples in this article.

The specific issue is when and how taxable assets are assessed (homes in this article). A couple demolished and rebuilt a bigger house; they expected their taxes to go up, but not to triple. Many of the resident homeowners have their property tax figures based on very old assessments/pricing. New assessments are made when houses are improved or built-new, but not when they change hands. The couple in the story show a good example of a possible violation in horizontals equity. Because they chose to rebuild they face higher taxes, but an equally-able couple already owning the same type of house could very easily have tax figures based on old assessments.

Also, there was a question in the review which we didn't need to study but is related. It was about how developers built narrow multiple level houses on a canal because taxes were based on canal frontage. In this case, their is incentive for people to not renovate or build new home in this area. It isn't exactly parallel, but it shows how existing tax structure can affect future decisions.

The article directly assesses equity as a concern. One of the cities mentioned in the article actually backed away from a tax reassessment. It doesn't give specifics, but I imagine it is because of anxiety over possible negative reactions from the people and political consequences (it mentioned something about politicians wanting to keep their seats).

http://www.nytimes.com/2008/10/06/business/worldbusiness/06europe.html?hp

This article talks about the ongoing repercussions of our baking problems, but our problems have created big problems overseas.. Germany stepped in over the weekend to ensure the German people that their private loans would be covered and everything is okay. People lost a lot of confidence and many banks in the EU are dropping credit lines and making people nervous.  Long story short, their govs (the EU) are trying to keep peoples confidence up and get out of their own financial crisis. I believe the article said this was the EU's biggest financial crisis in the last decade or so. I know this isn't exactly american public finance, but I figured we all haven't heard enough about banks yet. Basically.... the banks (over in the EU) also had some bad practices going on, and they are very very busy over there trying to nip this problem before it turns into something like ours and huge bailouts are necessary.

http://timesunion.com/AspStories/story.asp?storyID=724738

This article talks about a chain reaction that occurred because of people fearing a price jump in oil prices. As far as our class is concerned, the micro economic aspect of this seems to boil down to supply/demand. People panicked and some places shut down, lowering supply. When the supply went down the price went up for others. Just an interesting look at how the market, and individuals respond to these things.

http://www.nytimes.com/2008/09/21/us/politics/21campaign.html?ref=politics
When thinking about this article, one needs to ignore the political factors that are  inherent within. The subject of the article, Social Security, is why I chose the article. If Social Security were to go into the private sector it is interesting to speculate on the changes that would occur. If our SS funds were handled by the private sector and it was massively successful in comparison to our current situation, would taxes be lower? If the program did extremely poorly (say even because of a similar catastrophe in the stock market that we've seen very recently) would taxes increase even more to try to cover the deficit? I could be way off, but I think this topic can hit the public finance nail on the head because it trickles down to inviduals who will alter (if we assume rationality of course) their decion making processes to account for big issues like these.

If all confidence (hypothetically) in our SS was lost, would people save more, or invest their own funds? Is privatization of SS a huge step towards a "more-free" capitalist economy? Considering the timing it is a hard sell, but I favor privatization of SS, and I think it could have some great long run implications for Americans.