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Soak Wealth, Not Income?

Bruce Krasting's picture





 

Two big problems America faces are that there is not enough tax revenue, and income is skewed to the top 10%. These issues will define the 2012 election. Obama wants to lower the taxes that middle-income earners pay at the expense of those bastards who are in the lofty top 10% of income. Romney wants to lower taxes across the board, but his plan heavily favors the shit heels that are at the top of the pile. This chart compares the two candidate's proposals: .

 

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The Congressional Budget Office (CBO) wrote on this topic last week, presenting the following chart to describe what is happening:

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The CBO used the actual IRS tax data from 2009, so this info is an accurate description of who made what and what taxes were paid. The results confirm the problem. The top 20% of income earners make 51% of all income. This same group pays fully 68% of all Federal tax dollars. So who are these “fat cats” who are on top of the income pile and how much are they making? The results are surprising, the following shows the incomes for those in the top 20%:

81st to 90th percentile = $137,500
 
91st to 95th percentile = $175,800
 
96th to 99th percentile = $271,800
 
Top 1 percent = $1,219,700
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So who are these "wealthy" people in America?

Nearly half of those “rich folks” are a husband and wife who each make $65,000 a year. I understand that there are plenty of folks who don’t earn this much, but if those same people think that the households that bring in $132k a year are “rich”, they are wrong.

The people in this group are not fat cats, they are not rich and they are not bastards. This is your Dr., Dentist, accountant, small business owner. This group is what fuels the economy. Take half their income away and you have a big fall.

If you’re wondering who fits into this income group (91st to 95th percentile) consider that every Senator and Congressman is in this bracket.

We get up to the stratosphere of income when household income averages $272,000 a year (96 -99%). The folks in this group have nothing to complain about; they are doing fine. But I ask the question, “Are they truly getting rich?”

Then you get to the top of the pile. The average salary for the top 1% is a whopping $1,220,000. So the reality is that the top 1% includes:

- Damn near every pro athlete.

- Any face that you see on the silver screen.

- The bozos you see on TV every day (including the “names” on CNBC).

- Paul Krugman (His book sales this year will make him a 1%er.)

- Mitt Romney. But we shouldn’t forget that Obama is also in the 1% group. In 2010 the Prez made nearly five times the average income of those top 1% earners.

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Now lets see who is paying federal income taxes. This chart from the CBO report includes transfers from the federal government: .

 

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- The negative tax rates for the bottom 40% (minus 9.3% for the lowest quintile, and minus 2.6% for the second lowest quintile) includes payments of Social Security, Medicare/Medicaid and other government transfers.

- The middle 20% has an average income of $64,000 but pays only an average of 1.3% in Federal taxes.

- Those who make $93.5k (the fourth highest quintile) are still only paying 4.6% of their income in federal taxes, on average.

- The highest 20% of income earners pay 13.4% of their income on average. The breakdown of tax rates among this group are:

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Many people are advocating raising taxes on people who are making the "big bucks". What would happen if there was a giant increase in taxes? Assume that those "fat cats" that earned more than $250k had to pay 50% in income taxes and the “super rich” (top 1%) had to pay 75% of their income in Federal taxes.

Would that solve the problem? The answer is yes and no.

If taxes had been 50% for the 96-99% group and 75% for the top 1% in 2009, it would have generated addition tax revenues of $770B. A very big chunk of change. Projected deficits as far as the eye can see are in excess of $1 Trillion. Raising taxes on the top 5% would eliminate three-quarters of the shortfall. This result would be close enough to a balanced approach to take most of the budget pressure off of the table.

If we truly sock it to those with high current incomes, we can solve one problem. But another one is created. If we raise income taxes to levels that now exist in France, the result will be that 5% of the working population will be paying 80% of all income taxes! A large percentage of American’s might like an outcome like this. A manageable deficit; paid for by soaking the rich. I’m sorry to tell them that it won’t work. A plan where 5% pay 80% is not going to work. A plan that sucked $3/4 of a trillion of income out of the economy would result in a near immediate depression.

I look at the information provided by the CBO and conclude that there is no way out of the revenue hole the country is in by raising income taxes. While tax increases are part of the fix, cutting expenses has to provide the heavy lifting. But that is a joke, as there are very few places to cut expenses without also cutting entitlements. So cutting expenses is another political dead end.

There is no combination of cutting expenses and raising income taxes that would actually be effective. There is an additional option.

The only alternative is a wealth tax. Anyone who has a net worth over $5m (or $20m, or chose a number) has to pay 1% (or 2%) of that amount, every year. It would be like a death tax, except you paid it while you were alive. Think - pre-paid estate taxes.

Warren Buffett is always complaining that he doesn’t pay enough in taxes. The guy has a net worth of about $40b. If there was a 2% wealth tax he would have to cough up an extra $800m a year. That would shut him up quick; it would also solve all the fiscal problems.

Bill Gates would be forced to come up with an extra $1.2B. The Walton family would have to pony up $1.6B. And the good old Koch brothers would toss in a $1b.

If a 2% wealth tax was applied to everyone who had a net worth in excess of $5m it would add up to about $700B a year. That’s just about the right amount to get the budget to where it starts to make sense. This tax increase would not come out of current income, therefore the consequences to the economy would be muted versus a similar sized income tax increase.

Hopefully, I've convinced some readers that raising income taxes is a dead end. It may sound like a politically “smart” thing to say, but it doesn’t mean spit when shown in the light. Taxing income does not get the job done without too many adverse consequences. Only a wealth tax can make a dent.

I’m amazed that Team Obama has not proposed a tax on America’s wealthy. They must have concluded that there is no other option to balance the books. Maybe Buffett is blowing smoke in Obama’s ears. He should be. Buffett is going to get fleeced if something like this were to happen.

Note: I doubt we will hear talk of a wealth tax before the election. It would be very bad for Obama’s fund raising efforts if he brought it up. That does not mean he will not propose this if he is re-elected. I don’t see another away around the budget problems.

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Mon, 07/16/2012 - 10:19 | Link to Comment LMAOLORI
LMAOLORI's picture

 

Warren Buffet doesn't think it's immoral he hides his vast wealth in Bill Gates Foundation then clamor's for the rest of us to pay more taxes and this after we already had to Bail Out His Billions!  And therein lies a lot of the problems people like him who want to redistribute your wealth but not their own. With his money he likes to buy people like obama. I wouldn't mind seeing the tax loophole closed for him and other's like him myself.

Mon, 07/16/2012 - 11:01 | Link to Comment yochananmichael
yochananmichael's picture

Good point. Also the trust fund rich are largely Obama supporters who want to tax earned income. Obama will not tax hus supporters.

 

Mon, 07/16/2012 - 10:00 | Link to Comment The Chief
The Chief's picture

This is absolutely pathetic.

I would fear what the 1% would do with those assets should a montrerous idea such as this start looking real. You and your jack booted breathren can drop dead.

The government confiscates wealth only to destroy it.

Mon, 07/16/2012 - 10:01 | Link to Comment The Chief
The Chief's picture

oops, monsterous, I meant

Mon, 07/16/2012 - 10:01 | Link to Comment The Chief
The Chief's picture

oops, monsterous, I meant

Mon, 07/16/2012 - 11:31 | Link to Comment Toolshed
Toolshed's picture

Oops.....why let people wonder if you are stupid when you can open your mouth and dispell all doubt. Well done sir.

Mon, 07/16/2012 - 09:37 | Link to Comment John Law Lives
John Law Lives's picture

"Estate tax is fair, not immoral."

That is your opinion.  I do not share your opinion.  Neither does Ron Paul.  The attached link shares his views in an article he wrote several years ago.

http://www.lewrockwell.com/paul/paul328.html

Mon, 07/16/2012 - 09:39 | Link to Comment spooz
spooz's picture

Ron Paul and Mises don't get everything right.  Best to look at issues individually instead of buying into one person's version of truth and fairness.

Mon, 07/16/2012 - 10:15 | Link to Comment John Law Lives
John Law Lives's picture

"Ron Paul and Mises don't get everything right."

Ron Paul has this one right (imo).

 

"Best to look at issues individually instead of buying into one person's version of truth and fairness."

Thank you for the sage advice.  I have considered the merits of the federal estate tax and I believe it is wholly immoral.

 

Perhaps you might broaden your perspective and consider the origins of the federal estate tax in the US and the subsequent transformations it has undertaken since then.  Meanwhile, Congress has a spending problem.  The annual deficits are not primarily a result of insufficient taxation.  There is no collective will in Washington to sufficiently curtail spending.

Mon, 07/16/2012 - 09:03 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Bull fucking shit.  All  income should be taxed at the same rate (preferribly lower) for everyone, including coroporations (they are "people" too).

If it is money that you can spend to improve your quality of life, it should all be taxed at the same rate, period.  With all the bullshit games that paper-pushers play to hide their wealth this is the only way.

I know two venture capitla guys who pay roughly 15% and employ about six people.  We employ roughly 1,200-1,800 depending on the season and pay over 35%.  What the fuck?  end these bullshit paper games already and "mark to fantasy" accounting bullshit.

We can have an honest discussion about income or all you paper-pushers can go fuck yourself when the system collapses and you have nothing to eat.  Fuck you Bruce.

Mon, 07/16/2012 - 09:16 | Link to Comment spooz
spooz's picture

Your plan helps the elites build ever bigger piles.  Taxes should be LOWER for working stiffs and SMALL BUSINESSES.  And we Have to find a way to target the bankster/venture capitalist types better so we can get some of that back to reduce the deficit, so fuckin ay on that point.

Why shouldn't we use the tax code to try to encourage businesses of a healthy size?  Multinationals have no interest in our economy being sustainable, only in their bottom lines. 

 

Mon, 07/16/2012 - 09:17 | Link to Comment spooz
spooz's picture

weird double post. so, just... fuck you too?

Mon, 07/16/2012 - 09:27 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Humanity has been here before, some of the elite will get away clean, many average joes will die. The paper-pushers will hang themselves in the end as I see many already dealing directly with one another using PMs and barter for goods and services.  The moral hazard is already far too big on both ends of the spectrum.  Fine with me, we farm over 25,000 acres and will be just fine.  Our co-op is made up of many hard working individual and many of us are vets or still active duty, so fucking bring it.  We have done what we can to make our operation as sustainable as we can, but the truth (that no-one wants to talk about) is that you produce considerably less food using truly sustainable means (damn thermodynamics) and I am sure Nature will sort this out just fine.  The capital and resource mis-allocation and mal-investment will continue, until it can't, hedge accordingly.

Mon, 07/16/2012 - 09:31 | Link to Comment spooz
spooz's picture

In the long run you will be better off not getting sold on Monsanto's version of agriculture.  When the superweeds take over you will have to soak your crops with ever more toxic cocktails thanks to the wonders of genetic engineering.

Mon, 07/16/2012 - 09:01 | Link to Comment BeetleBailey
BeetleBailey's picture

ENOUGH of this monkeying around with the damn tax code Bruce!

I have been a proponent of the FairTax for quite some time.

A hard line in the sand VAT/consumptive tax, that can't be screwed with by damned lying politicians.

Some moron on here equated it to being "great for the 1%" - baloney.

It would do away with the damned IRS - accountants - every wasteful governmental BS "program".

IF you study it closely, and forget the rhetoric and baloney bias, the Fair Tax is the only TRUE way of solving our fiscal mess.

All else is horse shit.

Mon, 07/16/2012 - 09:07 | Link to Comment spooz
spooz's picture

FAIR TAX IS REGRESSIVE AND JUST HELPS THE ELITES EXPAND THEIR PILE.  WHAT'S FAIR ABOUT THAT BALONEY?

Mon, 07/16/2012 - 13:13 | Link to Comment BeetleBailey
BeetleBailey's picture

PROVE that it's regressive - show me FACTS - not fucking rhetoric.

It's isn't. Period.

Mon, 07/16/2012 - 10:23 | Link to Comment NeedtoSecede
NeedtoSecede's picture

Spooz, have you ever even read about the fair tax, or really researched it?  Just by the fact that you had to go BOLD AND ALL CAPS tells me you haven't.  Classic argumentative style of someone with a low level of intellect and a high level of bitterness.  When you can't win with facts or persuasion just SHOUT down the other side and their ideas.  May work other places, but its just waste our time here at ZH.  So save your class warefare, government can "fix" everything bullshit for some of the other forums you frequent. 

Whats this deal with all the anger toward the Fair Tax anyway?  Are you some low-level IRS clerk whose job will be eliminated when we all finally get pissed off enough to fix this abomination we call the tax code?  Don't worry, we only have enough rope for the top criminals, we will let you slink off into your mom's basement to torment others while you post your drivel on this internet thingamajiggy.

 

Mon, 07/16/2012 - 09:05 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Correct.  These paper-pusher wnat to make thing more complicated to justify the existance and hide their wealth while folks who create real value for the economy continue to get raped.  Fuck them and fuck bruce.

Mon, 07/16/2012 - 08:53 | Link to Comment booboo
booboo's picture

When taxes were high they went to productive enterprises like building the interstate hyway system and bridges that are now falling down. (you know, where the "stimulus money was suppose to go last time but instead went to Obama's coffers via a laundering process of giving it to solar companies)

Now, taxes go to cover "give me" programs that keep you voting for them. Stop twisting the rope they are going to hang you with.

Mon, 07/16/2012 - 09:18 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Hey moron, you forgot two pointless fucking wars and the INTEREST on the debt.  Pull you head out of your ass, you look silly.  FYI- the interest is going to a private banking cartel that you pay to print and coin your money. 

A considerable amount of the debt comes from money used to bailout private companies.  You forgot corporate "give me" programs.

Can you say "socialization of private losses"?  How about this, the next time a private company goes bust, the management and shareholders pay back the creditors with their own private wealth and leave the TAXPAYER alone. 

Mon, 07/16/2012 - 10:12 | Link to Comment booboo
booboo's picture

"you forgot two pointless fucking wars and the INTEREST on the debt"

Yes, you are  correct, So your point is to continue funding them with higher taxes?

Who's the moron

Mon, 07/16/2012 - 08:40 | Link to Comment booboo
booboo's picture

Corporatocracy cannot exist without a corrupted government picking winners and losers, who corrupted them you say? You did, your constant whining about "it's not fair" "I need" "we want" "we should".

In order to get your vote they must deliver and in order to deliver they have to stay in power to satisfy the un-holy trinity of beggars, (you) takers, (the government) and the enablers, (the ones they choose to be winners) The uber rich are where they are because in a sick twist of irony, you, by your nature, need them there. Case in point, who is the biggest winner in the expansion of federal welfare? Why JP Morgan. You spooz and your ilk are by your very nature are the sunlight in the photosynthesis process that causes the the lilly pad to grow, multiply and to soon cover the entire pond thus killing the entire ecosystem that lives there.

 

Mon, 07/16/2012 - 08:45 | Link to Comment spooz
spooz's picture

No, they stay in power by offering only two choices, both political parties owned by special interests.  Which is why the rich have a historically low tax burden and inequality grows as their piles get larger. The "lily pad" did just fine when taxes were high, as did the economy.  A fairer distribution of wealth makes for sustainability.  Look where the redistribution of wealth up to the 1% has gotten us.  Lets elevate the small business as the heroes, take down the corporatocracy.  We can thrive with a "small is beautiful" meme.

Mon, 07/16/2012 - 08:25 | Link to Comment ouchtouch
ouchtouch's picture

Good thing this idea is not allowed under the U.S. Constitution.  The Framers were geniuses, after all.

Mon, 07/16/2012 - 08:40 | Link to Comment spooz
spooz's picture

So estate taxes are unconstitutional?  How so?

Mon, 07/16/2012 - 08:36 | Link to Comment Boba Fiat
Boba Fiat's picture

"...there is not enough tax revenue"

 

Or another way to phrase it: there are too many government expenditures.

 

It's like fretting that there's not enough blood when you're bleeding to death.  Just close up the wound.

Mon, 07/16/2012 - 08:38 | Link to Comment spooz
spooz's picture

Right.  Let the elites keep their riches while the peasants beg in the streets.  Sounds like a perfect world...for some.

Mon, 07/16/2012 - 12:05 | Link to Comment Boba Fiat
Boba Fiat's picture

So the only way for the peasants to improve their status is through government handouts?  And who runs the government?  Elites.  Sounds like a plantation system.  I prefer individual liberty and personal responsibility in a nation where the rule of law applies to all men.  Haven't found such a nation yet, but always looking....

Mon, 07/16/2012 - 08:07 | Link to Comment wonderatitall
wonderatitall's picture

no , let it burn. burn baby burn and see all the fleas run away. they want a solution of facism because through no fault of their own the union goons and bongo beggars are unemployed. burn it down and let these rocket scientists find out..."where my check" , is the new national anthem....end the ponzi facist united states of slavery

Mon, 07/16/2012 - 08:17 | Link to Comment spooz
spooz's picture

If you really think union lobbys paid by worker dues stand a chance against corporate lobbies, you are delusional.  Corporatocracy seems to be the current reality.  Yours is just hype and propaganda.

Mon, 07/16/2012 - 08:38 | Link to Comment Oldwood
Oldwood's picture

I think most of us can agree that things are a terrible mess. It's just that you may well believe the answer is more government, either through taxation or other policies that can fix it and many others believe that government created the bulk of the problems we are now experiencing. Given that government consumption of GDP is at an all time high while so are all of our problems it would lead many of us to believe there is a strong correlation. The left believes that every policy failure is always, without exception, because we didn't spend enough. This is Krugman's point. Even though we had a record amount of stimulas spending it failed because it wasn't bold enough. Can we ever admit that a policy has failed? Even when forced by evidence that cannot be denied to admit failure, the left rationalizes it by saying they did it for the best reasons! The road to hell as they say.

Mon, 07/16/2012 - 09:04 | Link to Comment spooz
spooz's picture

The real problem with govenment is special interests lobbying for tax breaks and loopholes.  And too many career politicians are angling for pork that does nothing to make our economy more sustainable.  All bills should address single issues and riders should not be allowed.  Glass-Steagall was 34 pages and did the job.  Dodd-Frank has 2000+ pages and has the bank lobbyists angling for every loophole they can game.

Mon, 07/16/2012 - 07:05 | Link to Comment Colonel Walter ...
Colonel Walter E Kurtz's picture

Once they can legally take 1% or 2% of your saved wealth (while still alive), what is going to stop them from taking 50%, 75%, 100% of your earned wealth?

Let's keep the taxes on income only.

 

Mon, 07/16/2012 - 13:01 | Link to Comment Bruce Krasting
Bruce Krasting's picture

I agree. Taxes on income are preferable. How about we compromise?

For the next five years there will be a tax on wealth. It will skip every other year.

In 2012 it will be 2%. In 2013, nothing, In 2014 =1.5%, 2015, Nothing. 2016 =1%

 

The deal would be for the five years BUT as part of the deal it would be agreed that it would not happen again for an additional ten years.

 

This would only apply to those in the top 95%. It would start at $5m?? net worth??.

 

we need an extra Trillion for the next five years, this is another way to get through it without a crash.

Mon, 07/16/2012 - 09:18 | Link to Comment monoloco
monoloco's picture

It seems to me that the fair way would be a reasonable graduated income tax on all income with NO deductions plus an estate tax on unrealized capital gains above a set amount. The way the tax code is now, it doesn't matter what the rate is because there are so many loopholes, I mean seriously, why should people get a deduction for having more kids? Or being deeper in debt (mortgage interest deduction)?

Mon, 07/16/2012 - 07:42 | Link to Comment spooz
spooz's picture

Once they have all the money, what's to keep them from using their lobbying power to make themselves kings and lord over the peasant class? Such concentration of wealth is unhealthy for democracy.

Mon, 07/16/2012 - 08:44 | Link to Comment johnQpublic
johnQpublic's picture

well, they already have to a big extent

 

i would be curious to see the numbers on this though

would the wealth tax they paid each and every year exceed their income?

i believe that if you give .gov more money, they will spend twice the new increase

the good they do with what they spend is pretty damn minimal as it is

not to mention waste and fraud

something like 10% of .gov money goes to fraud now

trillions missing from the pentagram

medicare/medicaid fraud

 

my solution:end war on drugs

legalize and tax it all

end war on terror and quit terrorizing the US population and stripping their rights

jail the criminals on wall street and enforce the laws we already have to end the fraud waste and bailouts

::::balanced budget amendment

end the fed

stop the lies

Mon, 07/16/2012 - 09:24 | Link to Comment spooz
spooz's picture

Yeah, .gov needs to be cleaned up. Term limits, campaign finance reform, single issue bills with no riders or pork that are posted on the internet for discussion, and roll call of votes so constituents know how their representatives voted.  There's a start.

Mon, 07/16/2012 - 09:28 | Link to Comment LawsofPhysics
LawsofPhysics's picture

The problem is that you are asking these people to indict themselves, good luck with that.

Mon, 07/16/2012 - 05:24 | Link to Comment sbenard
sbenard's picture

Coveting and stealing collectivized and codified! Now I know Bruce' inspiration source. It ain't divine!

"The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If `Thou shalt not covet' and `Thou shalt not steal' were not commandments of Heaven, they must be made inviolable precepts in every society before it can be civilized or made free." -- John Adams (A Defense of the American Constitutions, 1787)

Mon, 07/16/2012 - 03:12 | Link to Comment Arthur
Arthur's picture

 

Hey Bruce, 

What about hitting all forms of income, not just earned income, with the same flat tax.  With no or minimal tax on the first 20k, if you want to be nice to the poor.  The wealthy would get tagged on dividend income and capital gains, though not as bad as your wealth tax

How would that not be fair?   What would the rate be?  If most everyone has skin in the game they might think a bit harder about what government programs are really necessary.

Your idea would never get past the Senate.

Most of the 1% work damm hard for the money.  There is a huge difference between the the top 1% and the top .01%

What percent of the top 1% make it by virtue of earned income year in and year out?


 

Mon, 07/16/2012 - 07:12 | Link to Comment spooz
spooz's picture

A lot of them are executives earning obscene salaries.  In 1980 executives equaled 42 times the average blue collar workers pay, now its 380 times. Jamie Dimon and the rest don't work THAT hard. A high tax rate on those guys would be a good thing.

"Most of the 1% work damm hard for the money."

Mon, 07/16/2012 - 10:30 | Link to Comment The Chief
The Chief's picture

Nothing wrong with that. Excel, Bruce, and you too could reap rewards.

In your system, you'd allow any walk-on flunky to play in the NFL just because he wanted to. That's fair isnt it? You'd also lower all his teamates salaries to be fair because we need to spread that wealth..

It's easier to confiscate other people's wealth (ie, steal it) than it is to earn it by being smart, frugal or innovative. Who needs innovation when you have several hundred thousand thugs with guns to take shit for you?

How did we get here? Your friends in this dirty government found accomplices in the private sector. They both need to go. They both will go, but not before the masses suffer a bit longer.

You are another elitist...just a different kind. Youre the "wanna be" who is willing to push his neighbor into the street while the jack-boots are conducting wealth sweeps .....house to house searches for rich people (the new "jews" according to Obama).... just so you can say "I belong!! He makes too much money!....he's behind the garage!"

History has shown that your kind will not be treated very well once you are discovered.

 

Mon, 07/16/2012 - 10:31 | Link to Comment The Chief
The Chief's picture

 

 

Mon, 07/16/2012 - 03:54 | Link to Comment TruthInSunshine
TruthInSunshine's picture

This isn't personal, but I think that Bruce is falling into some seriously dangerous quicksand here.

By focusing on the "appropriate manner and level of taxation" and "appropriate conduit for levying such taxes," Bruce has already succumbed to the notion, at least implicitly, that too-low-a-level of taxation is one of the ailments, and maybe even a critical one, of our economy.

I'd suggest, as an alternative possibility, that our government (for whatever reasons, and there are many), spends far too much in both good times and bad, relative to our true level of economic productivity and output. Has this been made even more possible, and for a far longer period of time, due to the consequences of leaving a hard money standard (via the closing of the gold backing of fiat, ala the Nixon Shock in 1971)?  I'd argue yes. If OUR government were forced to live within its means, by being restrained in conjuring fiat at zero cost from thin air, and instead be forced to balance its spending in a manner consistent with the existing level of real maximum economic output of its economy, we'd carry no debt, or at least nothing remotely close to what we do now.

Would this crimp growth, as reported in the manner it is now? Well, it would certainly crimp growth claimed and reported that's almost purely a result of debt/credit/fiat (they're all one-in-the-same) creation, and it would cut down on the boom-bust cycles that are becoming more frequent and more pronounced.

The issue of our economic malaise can't be solved via taxation. Even remedying those aspects of our current tax system that one could compellingly argue are unfair and unjust won't do much in the way of significance towards healing our broken economy.

We need to quit thinking of tinkering with taxes as a relevant and constructive cure for our economic problems, and instead reform the structure of what is, in reality, a massively bloated, extremely inefficient, and entrepreneurially suffocating government machine that has grown radically too large in size, power and  consumption/appetite.

The Krugmans of the world will argue that cutting government consumption will prevent us from ending our current economic malaise, while in reality, ramping up government consumption (at a time when it's already far too high) only pre-ordains us to commit to another bubble, as a temporary, false and misleading metric of "growth," via deficit spending, which will simply herald in a future worse economic crisis, breaking of normal markets, and won't "end" any economic malaise, but defer it and make it far worse.

To speak of taxation as a candidate and cause of our current crisis is dangerous for the reason that it begins a dialogue as to how to foster a recovery with an entirerely misleading and wrong prescription (even while acknowledging that the system is far from perfect and that it can be rationally argued to be unfair in many respects).

Our current and past (and future) crises owe much to the level of government spending, and not the level of government taxing.

 

Mon, 07/16/2012 - 07:17 | Link to Comment spooz
spooz's picture

The 1% have gamed the system to make themselves kings.  Time to turn that around some. 

http://www.occupy.com/article/how-us-corporations-went-producers-predators

Mon, 07/16/2012 - 02:23 | Link to Comment boiltherich
boiltherich's picture

We could triple the taxes upon the wealthy and they would still be wealthy.  For those that think $132,000 per year income is not wealthy I say when you work full time at minimum wages with no benefits $132,000 looks pretty goddamned rich.  And you can work forty hours per week with no benefits at minimum wages and get zero support from government for housing, food, healthcare, those are the poorest people in America, watch out for them, if only 10% get mad enough they will light a fire no government or rich pussy elite can put out. 

Mon, 07/16/2012 - 08:15 | Link to Comment Winston of Oceania
Winston of Oceania's picture

I look forward to that day, I'll put something hot between the eyes of those who would try to plunder me...

Mon, 07/16/2012 - 02:24 | Link to Comment boiltherich
boiltherich's picture

Wealth and oppertunity will be shared or it will be destroyed, you choose.

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