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Seven Decades Of Data Prove This Is A Really Dumb Idea... (But They'll Do It Anyway)
Submitted by Simon Black via Sovereign Man blog,
Roman Mairano had just married his sweetheart, and now he was eager to find a way to support her and their future family.
Both he and his new bride had come from very humble backgrounds. And hoping to build wealth, he began looking for new opportunities.
Roman went to a few wealthy contacts in the city and pitched to them that he had a plan to transport lumber to a city where there was a great deal of construction happening.
He offered that if they would back his venture financially, he would give them three-quarters of the profits upon his return.
They agreed. And in the year 1155, Mairano sailed with a shipload of lumber from Venice to Constantinople.
The venture was a success, as was the follow-on venture. Soon he was able to finance most of the journeys himself and keep a higher proportion of the profits.
Now, Roman’s story may be a parable. But it’s representative of untold numbers of people across Venice during the city-state’s golden age.
This form of financial partnership back then was known as a commenda, and it was prevalent throughout the Venetian economy at the time.
The commenda was essentially an early form of a limited partnership; it allowed people with energy and ambition to team up with investors who had capital to risk.
This was an incredibly unique arrangement in the Middle Ages: financial innovation and economic freedom. The Venetian state left people alone to take risks and prosper without the need for constant regulation and intervention.
Thanks to this level of freedom, Venice flourished and became a center of prosperity in the world at a time when the rest of Europe was still in the Dark Ages.
Venice’s currency, the ducat, even became a widely used reserve currency—ducats could be found in use as far away as Central Asia and China.
And all the opulence and beauty that you can still see in Venice today was essentially built in those times of economic freedom centuries ago.
Unfortunately not everyone was so keen to see mass prosperity.
A handful of wealthy families in Venetian society viewed the economy as a zero-sum game, as if someone else’s success were taking place at their expense.
Gradually they used their accumulated wealth to seize control of the government and impose restrictive rules aimed at cutting off commercial opportunities for new entrants.
They even created a police force where one had never existed before to enforce the government’s edicts.
It didn’t take long for wealth and prosperity to shift. Florence and Bologna very quickly became the new centers of wealth and prosperity, and Venice went into terminal decline.
This is a common story throughout human history. There’s almost always an elite, or government, with a ‘scarcity’ mentality that believes in the zero sum game, i.e. for anyone to be a winner, someone else has to be a loser.
This is a deeply flawed view. And you can see this misconception at work when they try to increase tax revenues by raising income tax rates.
This is a typical tactic. When they’re short of cash, governments almost invariably raise taxes.
Of course, the numbers show that raising taxes rarely affects total tax revenue.
In the United States, federal government tax revenue has been roughly 17% of GDP since the end of World War II, regardless of the tax rates.
In other words, the government’s ‘slice’ of the economic pie has been an almost constant 17%, no matter if they raised taxes or not.
Why? Because when they raise taxes, it provides certain economic disincentives.
People have less of a reason to invest, start businesses, or develop infrastructure. And this reduces the overall economic growth rate.
There’s a very looooong history which clearly establishes this point. And you’d think that a government would look at the data and recognize the obvious truth: their scarcity mentality doesn’t work.
But no.
Sadly, in the face of such overwhelming data, the Obama administration is now pushing to raise tax rates once again, including a capital gains rate that is almost double what it was in 2013.
The old joke about the definition of insanity is trying the same thing over and over again and expecting a different result.
My dictionary defines insanity as extreme foolishness or irrationality.
All joking aside, I find such behavior to be extremely irrational given the overwhelming volume of data… hence… insane.
Since the government’s slice of the pie isn’t going to change at all, the obvious answer is to do whatever they can to make the ENTIRE PIE bigger.
As the case of Venice clearly shows, that means guaranteeing economic freedom: leave people alone to take risks, thrive, and succeed.
What we’re seeing today across most of the Western world, unfortunately, is a strong push to stifle any such ambitions.
That’s why it’s crucial for any enterprising individual today to seek out places that allow ambition, talent, and drive to prosper.
The goods news is that thanks to the Internet and modern transport, it’s easier than ever to do so.
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History is littered with stories of people paving the way to prosperity, then digging up their groundbreaking path to discourage follow-on competition. Wealth encourages insecurity that the accumulated wealth will one day disappear, thereby encouraging all kinds of 'innovations' to not only keep what is already there, but to accumulate even more.
The money meme is the greatest illness man has ever been inflicted with. This affliction was not an accident or even 'natural' by any stretch of the imagination.
Government doesn't raise taxes because it's a good idea, they do so because they can.
Sort of like the reason why dogs lick their balls. Only better.
/snarc
Yep, and we should do to government the same thing we do to our dogs.
<snip>
pods
Someone should conduct a study on median garage/basement/shop size. What are the median sizes for politicians, bureaucrats, judges, bankers, and lawyers vs inventors, innovators, tinkerers, entrepreneurs and engineers? You might find some unpleasant answers there.
Simon Hack - Still believes that Russia invaded Ukraine
My modest shop space is 3300 square feet. Betcha Jamie and Lloyd have bigger shit stalls, and not a thing worthwhile comes from them.
Wait till they shit on the carpet, then rub their noses in it?
They might enjoy it.
Over half of Americans don't pay income tax. Obama's pandering to the majority on this, and it's totally unsustainable - but when has that stopped him?
While I agree many don't pay Federal income tax, the low income masses still pay a large percentage of their income on other 'taxes'. Look at all the utility, excise, food, fuel, SS, local and state, real estate, motor vehicle, sales and other not so obvious taxes paid by everyone.
And this doesn't even take into consideration all the taxes passed on to the 'consumer' by manufacturers and producers and thus hidden within the purchase price.
And ObummerCare is a tax. Justice Roberts said so.
The ones that never pay any taxes are those whose wages are PAID through taxation.
Even money they made through investments etc. is made off taxes.
Not true here in California. The lower 63% of the Population (those making less than $30K per year), only pay 3.2% of the State's taxes! The 16% that make 100K or more, pay 85% of the State Income Tax!
BTW, Kalifornia, spends 48% of the taxpayer and borrowed monies on "Health and Human Services" (taking care of the giant poor Mexican population), and then 26% goes towards "Edumacation" and 5% goes towards "Correctional Programs" or Prisons, as I like to call them! Added all up, it comes up a few points short of 80%!!!
I still have an Los Angeles County Auditor Report on Welfare Fraud, from July 2003. This is for the Department of Public Social Services.
Background
"DPSS is the largest locally operated social welfare department in the country, with a workforce of approximately 13,000 employees(!). The Department's major welfare assistance programs are CALWORKS, Food Stamps and General Relief. In calendar year 2002, the Department issued average MONTHLY BENEFITS of $172 Million dollars(!!!), on 535,000 cases."
Think about it, thirteen years ago, Los Angeles County ALONE, was spending $172,000,000 a FUCKING MONTH!!!
And they have 13,000 THOUSAND fucking County Employees that are all SEIU, Unionized little bitches as well! Think about their pay! Their Pensions! It's enough to make me sick, sick, sick!
Good. Those fuckers need to contribute in some way, but they still get more in gov't assistance than they pay in "other taxes" when you factor in welfare, unemployment, disability, and food stamps. Meanwhile they still get to vote for teh gov't to keep taking more from the productive and for the slow inevitable death of the entire economy. Parasites. Their only job is to vote democrat once every four years. Fuck 'em. These are the same shit heads that ell Mark Dice they will happily repeal the Bill of Rights to establish a New World Order.
obama needs to tax us MOAR!!!!!! we need more Government services like the TSA to help keep us SAFE!!!!
Cog: The money meme is the greatest illness man has ever been inflicted with. This affliction was not an accident or even 'natural' by any stretch of the imagination.
You have no idea how true that is.
Or do you? (wink, wink)
I could fill in the blanks but the topic is probably better followed up on your blog.
There is no intelligent way to argue that a tax on a man’s labor is anything but a direct tax.
Intelligence is the last thing desired while constructing or swallowing these narratives.
However a little K-Y jelly does go a long way towards smoothing the way.
A tax on labor is slavery.
If they are allowed to take a dime, they are allowed to take it all.
pods
Tax avoidance is patriotic.
And tax evasion is 5 to 10 with a healthy fine.
Indeed, the distinction between avoidance and evasion can be subtle. The distinction between the consequences, not so subtle.
Slave tax is the correct term.
The premise of this article seems to be that the government intends to achieve its stated goal, ie raising revenue.
Given the affordable care act, the war on drugs and the war on drugs and the war on poverty are the stated goals, and given the outcomes in each of these, it should be obvious by now that their stated goals are never their real goals.
The real goal of excessive taxation is simply to weaken potential resistance. They have laid seige to our city, the middle class/producers, and they are waiting to launch their frontal attack until we grow gaunt and weak.
Nothing new under the sun...
Tax and spend. Along with "hope", it is their only strategy.
Looters gonna loot loot loot loot loot
Gonna use the government boot boot boot boot boot
It's the human way to keep doing the same dumb shit (intentionally or not) over and over. History has shown humans don't ever learn. If humans actually learned anything from all the drama and mistakes throughout history then the world would look much different than it does.
You could have people from thousands of years ago travel to the present and aside from technology and other modern stuff being different they'd see humanity at the core is by and large the exact same as it was then.
Humans are a really dumb species given the potential they have.
Mostly true, but if you were to substitute the word "liberal(s)" for "Human(s)" the post would be more accurate.
Not really. There's almost no solid definition of "liberal" or "conservative" anymore. In most nations.
No one can agree on what they'll actually conserve to be conservative or what's being liberated or kept liberated to be liberal.
At all.
Fucking phonies on all "sides"
I like the way you think.
The problem with raising taxes on the truly rich, is that the same time Congress raises a tax on them, Congress also gets bribed into opening up a loophole for them. Secondly, the rich don't have to keep their money in the thing being taxed, they just shift it someplace else or find a way to defer taxes.
Obama is confusing tax rates with tax collection and in particular the big corporations that somehow pay next to nothing.
This man belongs in a jester's suit.
This is really the heart of the false narrative around the magic of capitalism:
"That’s why it’s crucial for any enterprising individual today to seek out places that allow ambition, talent, and drive to prosper."
As if the forward progress of societies was actually the result of atomized individuals just plugging away all day with their stupendous "drive" and "work ethic". In point of fact, the inventors and businessmen who get the limelight were in each case riding a larger social wave that was made possible by accrued social capital, the sense of community which helped create the social capital, and shared effort over time. That's the reason why 'busines as profiteering scheme' is a misunderstanding and an ouroboros which consumes itself, as the exernalization of costs destroy the social capital that was the unacknowledged secret ingredient in the 'capitalist miracle', and which made all these things possible in the first place.
The inventions of someone like Henry Ford for example, don't make much difference without a railroad system, a highway system, a network of steel production and transport, a class of urban worker willing and capable of manufacturing work, and a consumer with wages enough to pay for the cars. Not to mention the oil industry and the fact that we have to have cities and towns worth traveling to, and people who are motivated to travel. So much for the Randian vision of isolated hero-entrepreneurs. The reality is more of a cooperative, we-all-enable-each-others-success type thing. I could write a similar paragraph describing the deep dependency of Steve Jobs on the people around him, as he was a very "indebted" man in terms of the technologies, help, vision and support he received.
Social capital is what made technological advance possible in the first place, thats my thesis. We just dont realize it because we take it for granted.
What's that goofy 1/128 Indian hags' name? You sound familiar.
She is called "Fauxcahontas" which is Algonquian for "lying sack of shit".
Um, no - Each example you mentioned has one thing in common, it is based on the individual's right to choose their way of life and use their "drive" and "work ethic" to make their lives better.
"you didn't build that"
You smelt that, too? Thought it was just me.
-OrangeJello
ucde, just say it motherfukker...."you didn't build that". Schmuck.
I'm thinking you were downvoted for using the word social and societies and the fact that it hits close to home Obama's statement that a wealthy person didn't get wealthy all on their own.
I agree that we all stand on the shoulders of giants.
WE DO stand on the shoulders of giants- not the first one of which was created by gov't. Unless you're talking about banksters, but they weren't created by gov't., either. In fact, you might as well now say that gov't. is formed by banksters, for banksters.
A lot of the dumbos on this website stand in the crack of some giant's ass.
Bullshit. You're telling me, Henry Ford couldn't build cars until there were highways to support him? What kind of college did you go to, that taught you that fantasy? When Henry Ford built the Model T in 1908, I'd bet that at least 95% of the streets, roads and wagon paths on the United States were dirt. And when it rained, it turned to mud. Google what a Model T looks like. It has fucking wooden wagon wheels on it. And the suspension was sprung like a buckboard wagon.
Henry Ford paid his workers well, so that They could buy his cars. Soon everybody wanted one. The statement that the invention of Henry Ford didn't make much difference without infrastructure, has to be one of the stupidest things I've ever heard. What are you going to tell us next? That Thomas Edison waited for Hoover Dam and a National Power Grid, before he invented the light bulb?
Dup
"I will not raise taxes on anyone earning $250,000 or less."
Barack Obama.
ANYTHING UTTERED FROM A POLITICIAN'S LIPS IS AN OUTRIGHT LIE.
"Read my lips. No new taxes."
George HW Bush.
THERE IS NO DIFFERENCE BETWEEN THE POLITICAL PARTIES.
Tall Tom: "I will not raise taxes on anyone earning $250,000 or less."
hahahahah yea, what HE said. Obamacare is a tax. :)
Taxes are a political weapon used to disempower the constituency of your political opponents.
Taxation is the price that we pay for civilization..... A very simple and obvious point that today's Libertarian simpletons don't grasp. A given tax level may be too high or too low. The proceeds may be spent wisely or foolishly. but having no taxation and associated government is a disaster every time.
Then how come as taxation goes up civilization crumbles? How come as local tax lords are better fed from the masses they become more corrupt, less civil, more violent and jail more of us?
That's not civilized.
Having no taxation is success every time. It's simply rare because corruption is not.
Wrong. Civilization is in no way, shape or form dependent on taxation, heywood. As a matter of fact, civilization can quite easily exist with no government at all.
All that is required is for the vast majority of individuals to cooperate with each other, and ignoring controlling assholes- like you.
I apologize in advance for replying to my own comment- but this I must say;
ZeroHedge may have been initiated as a fight club, God knows I have some scars, but none that I regret.
However, just now I see ZeroHedge as a garden.... of ideas.
After we've beaten each other's asses to a pulp, we begin to realize that we're not so different after all.
And, despite ourselves, the garden is growing.
This is the genius of ZeroHedge- it grows in spite of itself.
Most of us are dysfunctional in one way or another, and this is how it should be- a community of misfits.
Taxation is the price that we pay for civilization..... A very simple and obvious point that today's Libertarian simpletons don't grasp.
The way that taxes are imposed is the problem. For example, the USA thrived at the end of the 19th century WITHOUT any form of income tax. The unconstitutional implementation of the income tax has done nothing to benefit the people of the USA and has only served to enrich those at the top of the monetary pyramid.
Heywood2 what the hell are you doing here!!???
Intelligence and any kind of thinking associated with what is for the common good is not tolerated here. Simply the fact you write sentences that aren't just lame attempts to make some flaccid one line quip cuts you out of the herd. ...or is it "heard"?
http://www.theguardian.com/public-leaders-network/2015/jan/23/nervous-su...
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With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people’s mind, the world’s super rich are already preparing for the consequences. At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.
Johnson, who heads the Institute of New Economic Thinking and was previously managing director at Soros, said societies can tolerate income inequality if the income floor is high enough. But with an existing system encouraging chief executives to take decisions solely on their profitability, even in the richest countries inequality is increasing.
Johnson added: “People need to know there are possibilities for their children – that they will have the same opportunity as anyone else. There is a wicked feedback loop. Politicians who get more money tend to use it to get more even money.”
Global warming and social media are among the trends the 600 super-smart World Economic Forum staffers told its members to watch out for long before they became ubiquitous. This year, income inequality is fast moving up the Davosagenda – a sure sign of it is poised to burst into the public consciousness.
Jim Wallis, founder of Sojourners and a Davos star attraction after giving the closing address in 2014, said he had spent a lot of time learning from the leaders behind recent social unrest in Ferguson. He believes that will prove “a catalytic event” which has already changed the conversation in the US, bringing a message from those who previously “didn’t matter”.
But as former New Zealand prime minister and now UN development head Helen Clark explained, rather than being a game changer, recent examples suggest the Ferguson movement may soon be forgotten. “We saw Occupy flare up and then fade like many others like it,” Clark said. “The problem movements like these have is stickability. The challenge is for them to build structures that are ongoing; to sustain these new voices.”
So what is the solution to having the new voices being sufficiently recognised to actually change the status quo into one where those with power realise they do matter?
Clarke said: “Solutions are there. What’s been lacking is political will. Politicians do not respond to those who don’t have a voice In the end this is all about redistributing income and power.”
She added: “Seventy five percent of people in developing countries live in places that are less equal than they were in 1990.”
The panellists were scathing about politicians, Wallis describing them as people who held up wet fingers “to see which way the money is blowing in from.”
Author, philosopher and former academic Rebecca Newberger-Goldstein saw the glass half full, drawing on history to prove society does eventually change for the better. She said Martin Luther King was correct in his view that the arch of history might be long, but it bends towards justice.
In ancient Greece, she noted, even the greatest moralists like Plato and Aristotle never criticised slavery. Newberger-Goldstein said: “We’ve come a long way as a species. The truth is now dawning that everybody matters because the concept of mattering is at the core of every human being.” Knowing you matter, she added, is often as simple as having others “acknowledge the pathos and reality of your stories. To listen.”
Mexican micro-lending entrepreneur Carlos Danel expanded on the theme. His business, Gentera, has thrived by working out that “those excluded are not the problem but realising there’s an opportunity to serve them.”
He added: “Technology provides advantages that can lower costs and enable us to provide products and services that matter to the people who don’t seem to matter to society. And that’s beyond financial services – into education and elsewhere.”
Which, Danel believes, is why business was created in the first place – to serve. A message that seemed to get lost somewhere in the worship of profit.
A few non Banksters attending a Bankster circle jerk.
Being used.
Any system that rewards a politician for giving away other people's money with no consequence for themselves is by definition a recipe for corruption. This is why socialism always fails.
Luckily, a growing number of countries (Chile, Hong Kong, Australia/New Zealand, Singapore, etc.) are moving in the direction of free markets, having already experienced the desolation of socialism first hand. This gives ambitious American ex-pats plenty of options for pursing wealth creation: just make sure you understand the ins and outs of FATCA by heart -- otherwise you'll get a *very* rude surprise come tax time.
The fact that they're thinking of raising taxes when they can just print the money instead shows that the effort to knock down producers is deliberate. It's incredible how they can do the exact opposite of the right thing with such unerring constance.
The tax raisers are not the money printers.
Does not the Fed control collecting (setting ) income taxes? Is it not the Fed who needs inflation to remove your savings?
The problem is that the Fed controls the Government, and it is a private for profit institution.
End the Fed. It is the hope for a better future for mankind.
What worked was when Andrew Mellon dropped the income tax and raised the capital gains tax.
Nothing productive comes from a rise in unearned wealth. If it did, then we would have seen record levels of productivity over the last six years. Instead we have seen the world economy collapse while 1% of the globe has amassed fortunes.
Raise the capital gains tax to 90%. If it causes the vermin of our society to flee to other countries to fleece, then we are all the better for it.
If we placed a $100k yearly tax on homes over 4000 sq ft it would help as well. We don't need more billionaire money laundering mansions. If you make it impossible for a 1%er to live a lavish lifestyle, they will leave. We've proven time and time again that it isn't the billionaire that moves the economy forward, it's the ability for the common man to forge his own path. The billionaire stands in the way.
Death to the money changers.
No thanks. I know farmers who built 4,500 square foot homes for their 7 kids out in the boonies, and paid for everything as they went. They aren't the problem.
The 1% will just pay themselves salaries on all their equity stakes instead of deferring income taxes in favor of capital gains taxes. They will still win, genius.
Taxation, inflation and devaluation are always wealth transfer mechanisms from the masses to the classes. You try to get clever, slick, and they'll get cleverer. Take away their legal authority to put a gun to your head and take your money - that's it...
Liberty Assisting Tax In Times of Utter Dire Emergency
L.A.T.I.T.U.D.E.
See? Taxes will boost the economy and give us LATITUDE!!
We're SAVED!
Forget about revenues and such that, that's bollocks, old-style-economics. The real reason to increase a tax nowadays in the western fiat-hemisphere is... Inflation. Maybe even wages wil go up a little, albeit less than the prices will climb.
+ 1,000. Inflation is the problem. The rich are long variable (inflation) / short fixed, and everyone else is short variable / long fixed.
Inflation isn't a singular point estimate - it's a measure of income vs. cost structure sensitivity for individuals.
ANY inflation is inequitable and helps those short fixed and long inflation sensitive assets. If the cost of eggs, healthcare and gasoline is meaningless compared to your equity and levered real estate value, you want MOAR INFLATION.
On the other hand, if you have a salary and gas, healthcare, eggs, clothes, etc. are a meaningful portion of your income, any inflation is bad for you. Salaries never keep up with inflation. That's just simple data...
barry the communist strikes again
what would lee harvey oswald do?
Take a bullet.
lee was a giver first, a taker second
Lets get to the chase. The end game is this.
Everything will be given to you by the gov, and the gov assigns you a 3 day work week schedule. You don't earn, nor need any money.
So we'll pretend to work and they will pretend to pay us. Sounds like a plan! What could possibly go wrong?
This is a common story throughout human history. There’s almost always an elite, or government, with a ‘scarcity’ mentality that believes in the zero sum game, i.e. for anyone to be a winner, someone else has to be a loser.
This is a deeply flawed view.
Just wanted to point out that in the absence of new markets to move to, it is actually a zero sum gain and for someone to be a winner someone has to lose. I know Simon agrees with me as he goes on to try to prove the exact opposite, but instead reinforces that it is a zero sum game and that when the government gains by raising a tax they lose as the money is pulled from a different location.
In other words, the government’s ‘slice’ of the economic pie has been an almost constant 17%, no matter if they raised taxes or not.
Why? Because when they raise taxes, it provides certain economic disincentives.
People have less of a reason to invest, start businesses, or develop infrastructure. And this reduces the overall economic growth rate.
tldr: it's a zero sum game.
That's a bunch of crap. The problem is because what should be taxed isn't, instead they are forced to try to leach it from what used to be the middle class. Why? Because the obscenely wealthy use their wealth to protect THEMSELVES from taxation.
Dear stupid,
The reason it's a zero sum game is that your illegitimate government has made it a zero sum game by removing the free market from the equation. Capitalism = Good...Debtism and Cronyism = Not Capitalism.