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To: Kirk © who wrote (22170)	7/1/2006 3:24:04 PM
From: J-L-S	Respond to of 42834

You can make the same argument and substitute "rent" with "energy." That is not true. Virtually everyone pays for energy, just as virtually everyone pays taxes. That is the essence of the point that is being made when one says that higher energy prices act like a tax. Most people pay rent in the form of renting money (business accounts, personal credit cards, home mortgages, and car payments, etc.). Most housing in this country is owned by someone and is usually mortgaged, as opposed to being owned outright. Truckers don't rent trucks, they buy them and they are usually mortgaged. So, the things that act like taxes are: 1) taxes, of course; 2) interest on loans; 3) energy expenses; 4) food, and; 5) clothing. In other words, the bare essentials. The cost of rent that some people have to pay on a living space (or a business space) is accounted for when calculating inflation. But it doesn't act like a tax because not everyone rents their living (or work) space. The purchase price of a living (or work) space is not part of the inflation calculation because these purchases are considered investments, not expenses. When you do that, the cost of higher rent for the trucker is similar.... As I said, truckers don't rent trucks. Truckers buy trucks. Are you and Bob going to argue next that higher rents are not inflationary too? Of course not. I answered that above. The cost of rent (of anything -- whether trucks, houses, or business space) is part of the inflation calculation. The purchase price of a house or business space is not part of the inflation calculation because these things are considered to be investments -- you maintain them, at relatively low cost to the owner, and their value goes up over the long term, and that increase will be your capital gain when the property is sold. On the other hand, the price of a truck is included in the inflation equation because they eventually wear out and become worthless -- they are not considered investments. Inflation is defined is loss of purchasing power. You are missing the point. The discussion is whether or not higher energy prices act like a tax. If it is accurate (as it is) to say that higher taxes reduces purchasing power, it is just as accurate to say that higher energy prices reduces purchasing power. Expenses act like taxes when everyone has to pay them. Therefore, rising energy prices act like rising taxes.