• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Santelli's 'Tax-The-Wealth, Not-The-Income' Plan

Tyler Durden's picture




 

With the varied interests of constituents very much in mind, finding a compromise over taxation will be worse than Sisyphean in nature we suspect. CNBC's Rick Santelli offers a strawman, that gets around Norquist's 'pledge' and perhaps provides cover for both parties. The Chicagoan recognizes that what seems like a high-salary to some is very much not to others and suggests instead of focusing on the income, we should focus on the wealth. This is not the first time such a proposition was suggested (as we noted 14 months ago that 'muddle-through' was over and "we are confident, that one way or another, sooner or later, it will be implemented. Namely a one-time wealth tax: in other words, instead of stealth inflation, the government will be forced to proceed with over transfer of wealth") Strawman or not, the fact that Santelli is discussing it (and demurs on whether he has been contacted) means it is on the table...

 

The Pledge...

The Strawman...

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Fri, 11/09/2012 - 15:33 | 2965602 lasvegaspersona
lasvegaspersona's picture

Sgt

who let you in on the obvious secret?

Fri, 11/09/2012 - 13:47 | 2964988 CuriousPasserby
CuriousPasserby's picture

Taking away people's already-taxed property, rather than their income really scares me. Sure 1% on the wealthiest doesn't sound bad, but where will it lead? Eventually they will just vote to take away everything owned by the top 49% and give it to the bottom 51%.

Which countries tax wealth today and how is it working? And what is wealth? What if you own a farm and can't afford to pay 1% or 2% or 5% of it a year.

Once you own property, the gvt should not be able to take it away without compensation.

Fri, 11/09/2012 - 13:54 | 2965021 SgtShaftoe
SgtShaftoe's picture

They simply can't and won't.  Washington is owned by Goldman and lobbyists, neither would support that.  The only path forward is to inflate, period.  They will inflate until the system flies apart.  The moment they started QE, that became inevitable.  They are trapped in an inflationary spiral.  They simply do not have a choice, but to print.  To refuse to print will bring down the entire system, and the lie would be exposed, unleashing the freshly understanding masses to the most egregious crime of fraud and theft in a century, blood of bankers, and government officials would fill the streets.  No, that is not an option.  They will inflate.

Fri, 11/09/2012 - 15:19 | 2965535 e.blair
e.blair's picture

"Eventually they will just vote to take away everything owned by the top 49% and give it to the bottom 51%."

A slippery slope argument?  Is that the best you got?  Pretty weak.

"Once you own property, the gvt should not be able to take it away without compensation."

So is that like the 7 families that carved up Hawaii and still to this day own most of the land?  Is their property off limits? 

Who pays you to post such drivel?

 

Fri, 11/09/2012 - 16:21 | 2965850 Dumpster Fire
Dumpster Fire's picture

For me, it's my little house I built and paid for (I thought) and yet can never seem to stop more due bills for same appearing in my mailbox.

Fri, 11/09/2012 - 16:41 | 2965978 catacl1sm
catacl1sm's picture

It's not as weak as you might think when you consider that income tax was supposed to only affect the top 1%. They had to get it passed as a constitutional amendment first. Once that was done, it was all down hill. Quite a slippery slope indeed.

Fri, 11/09/2012 - 18:14 | 2966324 Urban Redneck
Urban Redneck's picture

TPTB just called, they want their useful idiot back.

If you're going to throw down the "Land Barron" card in this farce of a shell game,

Why don't you at least propose a tax system that might actually recapture some of those 7 seven "families" lands?

Since these lands have all been long since transferred to the immortal Kamehameha Schools, Castle & Cooke Inc., Dole Foods, Alexander & Baldwin Inc, Maui Land & Pineapple, etc.

Parker, Grove, Campbell, Murdock, et al are just long dead names on painted on shells.

Fri, 11/09/2012 - 15:31 | 2965595 MachoMan
MachoMan's picture

Once you own property, the gvt should not be able to take it away without compensation.

Well, it'll take a constitutional amendment to be able to do so...  I see it day in, day out...  uncle sam has to pay fair market value for what it takes from you.  This is the law...  and there are plenty of places where you are, yes, even where you are, where you can legally enforce this requirement.  Sorry, but you're full of shit.

Fri, 11/09/2012 - 20:02 | 2966621 nufio
nufio's picture

whats wrong with 70 yr leases like they have in china? I seriously think thats a good system.

Sat, 11/10/2012 - 04:29 | 2967382 Parrotile
Parrotile's picture

Well, it'll take a constitutional amendment to be able to do so...

Or an Executive Order. Remember, under the present Constitution this is Obama's last term, so he's really not that concerned with "the little people" now that he's comfortable for the next 4 years.

If it suits TPTB (and this includes the Government, which is nowadays their "Enforcement Arm) to steal your property, you better believe they have the means to do just that.

"The Law is to benefit the Lawyers"

Remember Obama's background . . . . . .

Fri, 11/09/2012 - 13:48 | 2964993 PUD
PUD's picture

CHATTLE...NUFF SAID

Fri, 11/09/2012 - 15:55 | 2965703 crusty curmudgeon
crusty curmudgeon's picture

The extent to which sheep will voluntarily subject themselves to servitude is frightening.
Forget wealth tax...I predict "living wages" will once again be proposed.  It's coming.

Sat, 11/10/2012 - 00:40 | 2967164 Anusocracy
Anusocracy's picture

The problem isn't that government is screwing up, it's that it can't do anything right except cease to exist. And it certainly won't agree to that.

Government works as it was meant to. Always has.

 

Fri, 11/09/2012 - 13:49 | 2964998 Scribbles
Scribbles's picture

Are you guys bonkers?

Taxing wealth appeals to you?  That's PURE conviscation without even the pretense of a tax.  When the wealth tax is at 80% and we're all calling each other "comrade," remember what you posted in here.

Fri, 11/09/2012 - 14:00 | 2965054 Spastica Rex
Spastica Rex's picture

It's what they did to the European lords a few hundred years ago. Sucked to be them, too (although they seem to have landed on their feet).

Fri, 11/09/2012 - 14:02 | 2965073 Water Is Wet
Water Is Wet's picture

Are you saying Dimon's, Mozilo's, Blankfein's, Summer's, Buffett's, Munger's, Romney's, etc., etc., etc., wealth should not be confiscated?  The Attorney General has turned a blind eye to prosecution of fraud.  A wealth tax on everything over $50 or $100 million should work.  $100 million would still cover retirement and college education too.

Fri, 11/09/2012 - 14:29 | 2965252 azzhatter
azzhatter's picture

I'm on board for 100% confiscation of bankers wealth and jail cells with no vaseline

Fri, 11/09/2012 - 15:11 | 2965495 RSloane
RSloane's picture

Okay. No vaseline is just way over the top. Plus, you gave me bad visual images.

Fri, 11/09/2012 - 14:32 | 2965276 Blankenstein
Blankenstein's picture

A tax on Buffet, Munger and Blankfein, very funny.  Instead of taxing them, our government bailed them out with taxpayer money -don't you remember?

This tax on the 1% will never happen.  Instead they will tax those in the middle and upper middle classes, increasing the divide between the 1% and 99%, and giving even more power to the ruling class.  They will no doubt levy higher capital gains taxes on that same group, killing the retirement funds of private sector employees who no longer have pensions.  

Fri, 11/09/2012 - 17:16 | 2966115 Bicycle Repairman
Bicycle Repairman's picture

"A tax on Buffet, Munger and Blankfein, very funny.  Instead of taxing them, our government bailed them out with taxpayer money -don't you remember?"

LOL.  Stop keeping it real already.  Leave Santelli his little wet dream, won't you?

Fri, 11/09/2012 - 14:37 | 2965309 Scribbles
Scribbles's picture

Lemme jog your memory....

the income tax was supposed to be only on the very wealthy when they unrolled that.  The IDEA of supporting a new form of tax is hilarious.  Good thing Obama didn't run against Trotsky - from the sound of it, he would have lost.

Fri, 11/09/2012 - 14:43 | 2965353 tmosley
tmosley's picture

How about prosecuting the fraud rather than stealing from everyone in the same class, whether or not they got their money from fraud.

I wonder if you realize that your brilliant plan would only tax 56 people?  http://wiki.answers.com/Q/How_many_people_in_the_US_have_a_net_worth_ove...

I wonder how many jobs would disappear because of such an action?  I sure as shit wouldn't stick around for more than the few days it would take to arrange to move my wealth out of the country, and I'm no-where near that level.  But just as surely as the income tax started out as a tax on the ultra-rich, it will eventually be applied to EVERYONE.

Fri, 11/09/2012 - 19:32 | 2966536 blunderdog
blunderdog's picture

Prosecuting fraud sounds cool if you're not familiar with how the legal system here works.  See--the problem is, if I rip off $750 million bucks through fraud, I can *afford* adequate legal protection to prevent anyone from convicting me of any crimes.

This is how Capitalism trumps law, every time.  Those with access to sufficient money can afford to buy *anything* they need.  One thing they occasionally need is the service of folks who keep them out of prison.

The government can't afford to outbid the defendants--thus prosecution will ALWAYS tend to be a losing proposition.

And that's not even to get into the fact that putting folks in prison (or whatever) doesn't recoup any of the ill-gotten gains....

Fri, 11/09/2012 - 14:06 | 2965095 bidaskspread
bidaskspread's picture

It depends on your demographics. I am in my 30's, do I want to bust my hump because the generation before was completely irresponsible and enjoyed the benefits of the constant spending without thinking through the consequences; Hell No. Do I want to have to work as a slave because the generation before over promised to each other senior age benefits and agreed that I would pay it without my consent, Hell no. So decide , benefit cuts or taxing the nest egg; I don't want to cover you for your bad decisions.

Fri, 11/09/2012 - 14:32 | 2965277 Scribbles
Scribbles's picture

No, you'll still get it in the a**.

Why are they looking for new taxes? To pay SSA and Medicare and other welfare.  It's more transfer from you to the elite "democratic voter class"

Let the whole thing go bust.  It's a yoke off my neck, far as I'm concerned.

Fri, 11/09/2012 - 15:29 | 2965586 bidaskspread
bidaskspread's picture

It's already bust but the older population wants to keep it since they promised each other it on my behalf. I say if they want to keep let them pay for it. I don't want it, a better investment then SS and medicare would be tossing gold bars down a wishing well; at least you know that you'll likely never get what you wished for.I don't care if it's wealth/income/value added taxes that covers it as long as the people "who want it and agree to it" pay for it.

Fri, 11/09/2012 - 15:21 | 2965543 MiltonFriedmans...
MiltonFriedmansNightmare's picture

Yeah, but you're the exception, a 30 year old with a brain...in short supply in the USSA.

Fri, 11/09/2012 - 14:06 | 2965098 Schmuck Raker
Schmuck Raker's picture

Please tell me how taxing income is not PURE confiscation.

Same difference.

Fri, 11/09/2012 - 15:22 | 2965550 e.blair
e.blair's picture

Time for Zero Hedgers including Tyler to lay their cards on the table.  Are you interested in fighting oligarchy, or are you going to be knee jerk defenders of the Horatio Alger mythology?

Fri, 11/09/2012 - 16:48 | 2966012 tmosley
tmosley's picture

That's the falsest false choice I think I have ever seen.

You can't work your way to the top because the America that Horatio Alger wrote about is long, long gone.  Oligarchs rule in non-capitalist societies, not capitalist ones.  Having the veneer of a free market doesn't make it a free market.

Fri, 11/09/2012 - 19:35 | 2966547 blunderdog
blunderdog's picture

Um...dude, "the America that Horatio Alger wrote about" was FICTIONAL.  Those were WORKS OF FICTION. 

It's no more "long gone" than Middle Earth is.

Fri, 11/09/2012 - 15:32 | 2965599 ejmoosa
ejmoosa's picture

The Fifth Amendment:

nor shall private property be taken for public use, without just compensation

 

I am still lost as to what the just compensation might be....wealth is still private property, right?

Fri, 11/09/2012 - 16:01 | 2965715 crusty curmudgeon
crusty curmudgeon's picture

Not if government bureaucrats think it can potentially be of some public benefit.

If you think I am joking or exaggerating, you haven't read the Supreme Court's 2005 decision, Kelo v. City of New London.

What is "just compensation" in the eyes of a salivating bureaucrat?  Probably not what you would think it is.

Fri, 11/09/2012 - 17:19 | 2966130 Bicycle Repairman
Bicycle Repairman's picture

The Fifth Amendment?  That's a singing group, right?  Age of Aquarius and so forth?  Black people, I think.

Fri, 11/09/2012 - 13:49 | 2964999 Tsunami Wave
Tsunami Wave's picture

There is a time for everything.. high taxes.. low taxes, but I hate income taxes. That and Grover Norquist's pledge he tries to make everyone sign.

Fri, 11/09/2012 - 14:05 | 2965092 MiltonFriedmans...
MiltonFriedmansNightmare's picture

There is a time for everything, including fascism, and it's time has arrived.

Fri, 11/09/2012 - 13:53 | 2965012 GeezerGeek
GeezerGeek's picture

I suggest that a trial of this idea be run in California, since they need money desperately. Tax wealth over $5 million at 95% unless the money is invested in something productive. The trick would be to properly define 'productive' so owners of businesses that they actually participate in would not be forced to dilute said ownership. I still remember what happened to the Miami Dolphins when Joe Robbie died; his family had to sell out to pay the death taxes. Although never having been a Dolphins fan, I found it disgusting that the government should have the power to destroy. I would, however, be filled with glee to see all those Hollywood socialists given a financial enema.

Fri, 11/09/2012 - 14:35 | 2965292 CommunityStandard
CommunityStandard's picture

Hollywood would just raise salaries, and therefore raise movie ticket prices.  California's misfortune would be spread out across the country (at least for those who go see movies).

Sat, 11/10/2012 - 04:37 | 2967384 Parrotile
Parrotile's picture

Positive outlook for those profiting from media piracy then??

Fri, 11/09/2012 - 14:59 | 2965435 SimplePrinciple
SimplePrinciple's picture

And I assume "productive" would be anything green or in support of unions?

Fri, 11/09/2012 - 13:53 | 2965016 bidaskspread
bidaskspread's picture

Get ready baby boomers; the piper is starting to play.

Fri, 11/09/2012 - 13:59 | 2965049 SheepDog-One
SheepDog-One's picture

Fat lady sipping some herbal honey tea lubin' up those vocal chords getting ready to SING!

Fri, 11/09/2012 - 14:11 | 2965134 haskelslocal
haskelslocal's picture

You got it pal. Funny how this board goes on and on about the build up of margin and credit and borrowing from the future. Everyone's on board with that one. Then when it comes time to remind people of the consequences of exponential borrowing, they shutter and blame. Thanks for showing me there's sanity.

 

Fri, 11/09/2012 - 14:05 | 2965023 falak pema
falak pema's picture

"socialism" comes to the USA.

Back to FDR and more fiscal revenues, you can't get away from it. Will the state shrink in expenditure to reduce the debts and deficits? And will the US export more and import less? 

As far as debt is concerned, by increasing taxes  you run into the "greek" or euro conundrum : as taxes rise, the GDP shrinks and debt as proportion of GDP rises, and conventional tax revenues fall proportionally with GDP. We are back to square one, or worse! You need an export dyanmo to kick start the economy on solid basis. 

To compare with China : China exports 25% GDP and imports 20%...Not USA...that is the OTHER problem of USA : how do you turn the trade balance around?

The US HAS to export more, like EUrozone, or it will decline in riches if it continues to import more than it exports.

Simple as that. Having said that I am all for taxing the plutocrats as Santelli proposes; as they do not invest productively and speculate from Caymans. They deserve to pay more as they are corporate tax dodgers, and their rent/revenues are not comparable with those of true entrepreneurs.

Fri, 11/09/2012 - 13:57 | 2965025 Dr. Engali
Dr. Engali's picture

I am in agreement with Flakmeister go the first time to a certain extent, but not for the same reason. The majority of the rich funded and supported Obama. Obama took 8 out of the 10 of the wealthiest counties in the country. If he ran on raising taxes and they are stupid enough to support him then I say tax the fucking shit out of them.

Of course it won't work because they will have to sell productive assets in order to meat the tax requirement , therefore driving down asset value but hey they wanted it.

Fri, 11/09/2012 - 13:59 | 2965052 fonzannoon
fonzannoon's picture

Obama will cut off the mortgage tax deduction for anyone making over a million dollars. They will pay off their mortgage with this years bonus. The rich will find a way around all of this. Or they will move or set up corporations in Nevada. It's all bullshit.

Fri, 11/09/2012 - 14:02 | 2965075 Dr. Engali
Dr. Engali's picture

Oh I agree. This all just irritates the hell out of me though. Everybody in this country it seems has gone insane.

Fri, 11/09/2012 - 14:08 | 2965103 fonzannoon
fonzannoon's picture

This whole mess has made me so jaded.

Fri, 11/09/2012 - 14:46 | 2965365 RSloane
RSloane's picture

I'm right there with you Fonzi. I think a lot of us are.

How you doing? Power back and supplies restored?

Fri, 11/09/2012 - 15:14 | 2965509 fonzannoon
fonzannoon's picture

I am good thanks. Everytime I get too caught up with this stuff I get hit in the head with a toy by my 3 year old who is stamping her feet and yelling "PLAY WITH ME". She keeps me grounded. Thanks for asking. I hope all is well by you. Nice job with the auction. My wife loves picking up good stuff on the cheap. She would appreciate that post more than me.

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