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Guest Post: Do The Parasitic Elite Pay Any Taxes?

Tyler Durden's picture





 

Submitted by Charles Hugh Smith from Of Two Minds

Do the Parasitic Elite Pay Any Taxes?

The parasitic financial Elite don't do any "work" in the sense of something beneficial for society, as no voluntary payment for their services exists.

If a parasite's entire income is leeched from the productive, then isn't their entire income a tax on those creating value? In this sense, the share of the parasite's income which is carved off by the Central State as tax revenues is a secondary tax: the parasite's entire income is a tax on the economy.

This distinction between legitimate wealth derived from value creation (think Steve Jobs/computer industry) and parasitic wealth skimmed from the productive (think Mitt Romney/investment banker) is the heart of Correspondent James B.'s insightful inquiry into the question: can the parasitic Elite be said to pay taxes at all, given that their income is itself a tax on legitimate wealth creation?

I'd like to add something to your recent essay Income Tax Solution: Apply Social Security Taxes to the Super-Wealthy. (June 1, 2012)

 

I'm a former banking executive and I've had the opportunity to figure things out from the inside. (Emphasis added: CHS)

 

In the article it mentions the disparity between what the rich pay in terms of percentage of earnings for income tax compared to the middle class.

 

However, a substantial portion of the rich earn their income by co-opting the income of the middle class via money-printing / income suppression. They can do this by being in the loop for the "money printing" machine as the Fed manages the economy to benefit the connected Elite.

 

I think it's underappreciated that the banking system and the financial system has been perpetually bailed out on a moment-by-moment basis by printing money to cover duration mismatch while the Fed has replaced transaction balances with credit - thus enforcing a spread for the benefit of the connected financial Elite, corporate CEOs, etc. This has been going on for decades with periodic accelerations of the bailout process due to mismatched duration excess (i.e. the Austrian Economics Business Cycle).

 

The middle class (the workers) put value into the currency by producing, while the money-printers take that value out (by dilution, and by lobbying with the value they've stolen). It is an organized, structured system of theft, and that includes VISA, etc. which are cash substitutes because cash has been replaced with credit transactions. No amount of taxes are ever "paid" by those rich, as all their income is stolen.

 

For example, quite a number of top banker CEOs have not paid any taxes in the economic sense, they are not productive (they are destructive), and that is true even if their 1040 says they pay "60%". Someone else (a producer) paid their taxes ... Money really is a "veil" in this case. It diverts from the truth.

 

Unfortunately, the legitimate rich are really hurt by this process, as they impart tremendous value and have that value taxed away. They are, in a sense, the justification for hitting the lower and middle classes, and they suffer particularly for it.

 

In my view, we should make all cuts and adjustments from the top down, starting with those institutions that destroy value (pretty easy, just let the market work and let the organizations fail), as that is where the problem lies, and there can be no recovery as the poor simply do not impart enough impact in this parasitic process to make the difference. In fact, many poor simply want a job, and jobs are hard to find as the impediments to working rise higher and higher with the necessity of rationing the spoils in a crony capitalist system.

 

A recent Levy research article noted the total support by the Fed for the banking system was 29 trillion dollars. While that is not direct cash infusion (with FNMA / FHLMC / FHA, and other back door programs) - there is simply no group in the U.S. with as much influence and welfare.

 

In other words, the connected insider Elite pay nothing at all in taxes - and in fact they don't do any "work" in the sense of something beneficial for society as no voluntary payment for their services exists.

Thank you, James. That last line is profound: investment bankers like Mitt Romney don't solicit voluntary payments for buying companies and reshuffling the assets to skim their parasitic siphoning of the wealth created by others.

If we understand the difference between parasitic wealth and real value/wealth creation, we can properly align the tax structure to reality: the tax on authentic wealth creation should be low, to encourage wealth creation and the employment (broad-based wealth creation) generated by legitimate value creation.

We must also understand that the Central State now protects and enables parasitic skimming as the primary function of the nation's financial system. Thus the entire financial system is parasitic on the wealth of the nation.

Financial parasitic incomes should be taxed at 99%. If Mitt Romney reshuffles assets created by others and skims $100 million, 99% of that parasitic wealth should be returned to the nation via taxes. The parasite still gets to keep $1 million, more than enough to live well but not enough to buy the presidency, the Congress and the regulatory machinery of the Central State.

All those who claim the Mitt Romney/investment bankers are "creating wealth" are either terribly confused about value creation and capitalism, or they are lackeys/ apologists of the parasitic Elite.

If we cannot grasp the difference between parasitic wealth and legitimate value/wealth creation, then we are well and truly lost.

 


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Wed, 06/13/2012 - 13:25 | Link to Comment SourNStout
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Nope

Wed, 06/13/2012 - 13:29 | Link to Comment long-shorty
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You mean you don't trust Congress and Obama to fairly assign "parasite" status to certain income for great benefit of glorious motherland? You not patriot.

Wed, 06/13/2012 - 13:41 | Link to Comment Manthong
Manthong's picture

Time to hoist them on their own petard and force them to justify their existence

http://www.youtube.com/watch?v=7WBRjU9P5eo

Wed, 06/13/2012 - 13:45 | Link to Comment BKbroiler
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How did this make it to ZH?? oh, guest post.   Remember, taxing the rich is socialism

Wed, 06/13/2012 - 13:46 | Link to Comment Bananamerican
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Post of the YEAR!

Wed, 06/13/2012 - 13:56 | Link to Comment BKbroiler
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You mean you don't trust Congress and Obama to fairly assign "parasite" status to certain income for great benefit of glorious motherland? You not patriot.

That's a pretty good tactic.  Take a perfectly logical point about those who providing nothing to society while receiving millions and shit on it by saying that it would be the president "assigning status", scaring all the tea party monkeys into agreeing with you.  Wave that yellow flag high while Jamie Dimon drinks your milkshake!!!   I just lost 40% of my wealth, go free market!

 

Wed, 06/13/2012 - 14:03 | Link to Comment Doubleguns
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First and foremost one must assign "parasite" statue to congress and Obama. How much money has been wasted on all of them. NOT in salary but in benefits, vacations (first family too), junkets, election travel, Nancys plane, and the list goes on and on.

Wed, 06/13/2012 - 14:41 | Link to Comment Michael
Michael's picture

This is the only difference between the D's and the R's, which group gets to spend the taxpayer loot, on what projects, and lining their own pockets with taxpayer money.

That's why I'm voting for Barack Obama, he doesn't have as much money as Romney yet.

And this is why I just thank God each and every day for the complete and total economic collapse of the USA, so the beast is starved to death with no money.

Wed, 06/13/2012 - 14:49 | Link to Comment New_Meat
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Mikey, it took Poland ~40 years to overcome their "vote" for their "Obama."

- Ned

Wed, 06/13/2012 - 15:40 | Link to Comment granolageek
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Since when is being invaded by the Red Army a "vote"? Sheesh.

Wed, 06/13/2012 - 15:42 | Link to Comment New_Meat
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"vote", in "quotes" don't cha' know.

Wed, 06/13/2012 - 17:03 | Link to Comment Pinto Currency
Wed, 06/13/2012 - 17:07 | Link to Comment Harbanger
Harbanger's picture

Churches, right.  Oh no. It's bankers and progressive foundations.

Wed, 06/13/2012 - 15:48 | Link to Comment Dr Benway
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Excellent post!!

 

And its a very very important distinction: between those that acquire wealth through creating value and those who acquire wealth through stealing it.

 

Its the difference between an inventor entrepreneur and an old mafia boss (or banker or politician).

Wed, 06/13/2012 - 17:43 | Link to Comment squeal
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Your conflation of Obama with socialist or communist leaders past or present hereby disqualifies you from serious consideration by any rational, informed person.

Obamney 2012!

Wed, 06/13/2012 - 15:27 | Link to Comment Harbanger
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Thanking God for something you wish for is not a good idea.  And a little ungrateful.

Wed, 06/13/2012 - 17:19 | Link to Comment Michael
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It's not something I wish for, it's a 100% mathematical certainty.

And it will go a long way in solving most of our problems.

Thu, 06/14/2012 - 05:19 | Link to Comment Ar-Pharazôn
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do you really think that Obama is there to solve americans problems? looks like he's doing the exactly opposite....

Thu, 06/14/2012 - 00:21 | Link to Comment RockyRacoon
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Michael, sorry to see that only the bold text was read by those who rated your comment.  The depth of thinkers at ZH hasn't changed over the years.   Makes me sad.

Sun, 06/17/2012 - 20:16 | Link to Comment Dr. Sandi
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Mr. Coon, sir. I must respectfully disagree with your assertion, to wit: "The depth of thinkers at ZH hasn't changed over the years."

It most certainly has. Most of the best commenters have gradually gotten the hell out of here. And many of the rest, such as yourself, have noticably curtailed their dangling of pearls before the ever increasing swineishness of the place.

And THAT makes ME sad.

Wed, 06/13/2012 - 13:50 | Link to Comment Buckaroo Banzai
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No, income taxes are socialism. By definition. IT'S FUCKING REDISTRIBUTION OF WEALTH YOU FUCK.

Wed, 06/13/2012 - 14:04 | Link to Comment BKbroiler
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quit screaming, pussy.  CAPS LOCKS MAKES YOU LOOK ANGRY AND DUMB.   All taxes is redistributing wealth.  Having a family is redistributing wealth, as is hiring an employee.  Idiots like you are the reason this country has been gladly handed to the banksters, you're too brainwashed to see you're being fleeced.  The middle class lost 40% of their wealth while the top 10% gained.  Is it getting through to you at all??

Wed, 06/13/2012 - 14:06 | Link to Comment Dumpster Fire
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 Having a family is redistributing wealth, as is hiring an employee.

 

Not sure where I am on this but those two are at least voluntary.

Wed, 06/13/2012 - 15:02 | Link to Comment Troll Magnet
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also, you don't go to jail if you don't "redistribute" your wealth to your own family members and you certainly don't go to jail for not hiring.  

Wed, 06/13/2012 - 15:13 | Link to Comment Darth Hayek
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Yet.

Wed, 06/13/2012 - 14:21 | Link to Comment Doubleguns
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"All taxes is redistributing wealth."

Disagree. Only if you are taking wealth from one and giving to another one without them having to perform work for it.  Not to fix roads, bridges, build schools, pay the military or buy munitions. These are payments for goods and services hardly a "redistribution" of wealth.

Wed, 06/13/2012 - 14:32 | Link to Comment BKbroiler
BKbroiler's picture

fix roads, bridges, build schools, pay the military or buy munitions.  These are payments for goods and services hardly a "redistribution" of wealth.

So the government taking your tax dolars and using them to build schools your child does not attend in not redistributing wealth?  Now I am confused, and your co-horts may disagree.

If performing work is the grounds for it not being redistribution, who is to say Jaime Dimon is not working for his "cut" of the government cheese.  He sure does.  You seem reasonable, but the argument sucks.

 

Wed, 06/13/2012 - 14:48 | Link to Comment FeralSerf
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It can be argued that increasing the level of knowledge and skills in a society increases the wealth of everyone so even those without children in school benefit.

OTOH, it can also be argued that the schools are a necessary evil whose purpose is to brain-wash and condition the easily moulded young minds into being profitable and non-problematical members of the elites' herds of livestock.  Revolutions are expensive and wasteful of resources.

Wed, 06/13/2012 - 14:56 | Link to Comment BKbroiler
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I think both are true, the first is the intent and the second the result.  good post.

Wed, 06/13/2012 - 20:36 | Link to Comment Ident 7777 economy
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BKbroiler :

" fix roads, bridges, build schools, pay the military or buy munitions. These are payments for goods and services hardly a "redistribution" of wealth.

So the government taking your tax dolars and using them to build schools your child does not attend in not redistributing wealth? "

 

Building actual schools which educate as opposed to indoctrination compounds are two separate things, as are 'schools' which simply act as 'day-detention centers' for otherwise unsupervised 'yutes' ...

 

Thu, 06/14/2012 - 00:25 | Link to Comment RockyRacoon
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All "schooling" ought to be a local endeavor.  The subjects taught and the expenses for same should be the obligation of local authority.   If you don't like what is being taught, home school.  That, too, should be legal and encouraged.  NO education should rise higher than at the State level.... period.

Wed, 06/13/2012 - 14:41 | Link to Comment LetThemEatRand
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It would be much simpler if Buckaroo and his ilk would just be honest and say that they want all the benefits of living in a society but they do not want to contribute anything to it.  Instead, they create a complex narrative about a mythical free market that would magically exist without any societal infrastructure if we just stopped having elected government and taxes.

Wed, 06/13/2012 - 18:35 | Link to Comment Buckaroo Banzai
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Holy shit are you fucked in the head. Please, please go back to DailyKos.

Wed, 06/13/2012 - 21:20 | Link to Comment malek
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And it would be even simpler if you would be honest and say that you want to be the person who decides which benefits everybody "wants" and therefore must pay for.

Wed, 06/13/2012 - 14:31 | Link to Comment TheGardener
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I get confused, are you publicly speaking out for the crime of paying taxes in all seriousness ? You know, even considering that the best of your avoidance tactics is just to get along with the state means that you are a collaborator of the worst sort, passive , not even active ?

It takes a weak mind and soul to work for or live off the state, I guess they don`t have any mirrors in their tiny flats from where they envy all other more productive folks.

But taxpayers truly finance state terrorism .

Wed, 06/13/2012 - 14:38 | Link to Comment BKbroiler
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Jesus, I don't even know where to start, you should let your more educated friends post instead of you.

It takes a weak mind and soul to not know that without some taxation any state collapses.   If you can point out any state in the history of time that has maintained itself without any taxes, I'd love to hear it.  Maybe you just wandered here from drudge.  Maybe Glenn Beck sent you, but this is grad school, not kindergarden.   I pay 25% of my income in taxes and do so happily because I made good money after starting with absolutely fucking nothing and I feel I owe some of that money back to the country that made it happen.  Go read a book.

Wed, 06/13/2012 - 14:40 | Link to Comment AnAnonymous
AnAnonymous's picture

Better than that: US citizens took pride in crushing stateless societies thanks to the mighty power of their US citizen state apparatus, that they described as an evidence of their superior humanity.

Wed, 06/13/2012 - 17:18 | Link to Comment narapoiddyslexia
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Like the Tibetans?

Wed, 06/13/2012 - 16:02 | Link to Comment TheGardener
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"It takes a weak mind and soul to not know that without some taxation any state collapses."

Glad you got at least a glimpse of what I tried to put across.

To get rid of this state of affairs stop paying taxes.

Your kind of meekly minded soulless socialists will just starve with your anemic state, good riddance !

Wed, 06/13/2012 - 17:42 | Link to Comment Hobbleknee
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There was no personal federal income tax in the US until 1913.

Wed, 06/13/2012 - 22:39 | Link to Comment RiverRoad
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Jesus?  He had a little problem too, I hear, with some folks who were doing some "skimming" around the temple.

Wed, 06/13/2012 - 19:49 | Link to Comment Don Keot
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I have recently become aware that as generations in families on welfare are common it is also true that generations of public workers are also very common.  I know a person locally that was as county worker and their two children are public workers as are their spouses.  While on child birth leave they even accrue sick leave and vacation time, just as if they were working.  Today it is very difficult to eat at the public trough if you do not have connections.

Wed, 06/13/2012 - 14:51 | Link to Comment t0mmyBerg
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If you are not angry at the perverse waste of all resources that get sucked into the great government maw then you are dumb.  It is in fact time for more anger.  And yes, a good amount of that should be directed at bankers who pay themselves well if that money is earned by borrowing at or close to 0 with a guarantee that it will be so for an "extended period" while lending back to the great money sucking black hole that is the federal and state governments at some tens or hundreds of basis points higher for a slightly longer term.

Anything that deprives the beast of the revenue it needs to feed is to be applauded and anything that feeds it denigrated.  BKBroiler, that puts you in the latter camp.  OBVIOUSLY (there is that caps thing again) there needs to be some level of taxes to support the basic services contemplated for a government of limited powers but the point when the apparatus could be trusted to do anything even remotely well has long since past.

Wed, 06/13/2012 - 15:12 | Link to Comment BKbroiler
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BKBroiler, that puts you in the latter camp

There's your leak, friend.  I have my own camp.  I support guns, gold, the environment, and a womans right to choose.  that last one saved my ass a few times :)  That makes me a shitty republican or democrat, but those are sheep tags anyway.  You can lump me in with whoever you want, but without taxes the world stops in its tracks.

Wed, 06/13/2012 - 15:15 | Link to Comment Papasmurf
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"and a womans right to choose.  that last one saved my ass a few times :) "

After the first mistake, it just makes you a stupid inconsiderate jerk.

 

edit:  I left out selfish.

Wed, 06/13/2012 - 15:30 | Link to Comment BKbroiler
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it just makes you a stupid inconsiderate jerk

That's because you don't get laid enough, or you would sympathise.

Maybe Smurfette is on the rag, or fucking Grendel Smurf behind your back.  Get tested.

Wed, 06/13/2012 - 15:45 | Link to Comment BKbroiler
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oh get a sense of humor.   killing babies is only a little funny.

Sun, 06/17/2012 - 20:20 | Link to Comment Dr. Sandi
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Just don't waste the ones you kill.

Baby Back Ribs anyone? Mmmmmm!

Wed, 06/13/2012 - 16:03 | Link to Comment kekekekekekeke
kekekekekekeke's picture

as a woman... how? 

 

oh right all women have baby rabies and are just dying to spawn with whatever penis they can sink their claws into.  I bet they felt relief

Wed, 06/13/2012 - 16:31 | Link to Comment BKbroiler
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hahahahahahahaha

you're absolutely right, they did.

Wed, 06/13/2012 - 17:51 | Link to Comment kekekekekekeke
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I didn't mean that as a personal attack btw it's just parenting is hard enough with both partners on board let alone a *surprise*

I know many of the men on this board think abortion is terrible but I am so fucking grateful it's still (sort of) an available option and I'm in a committed relationship in love livable income blah blah blah

Sun, 06/17/2012 - 20:23 | Link to Comment Dr. Sandi
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Abortion shouldn't be an option. It should be the default position.

Raising the little bastards is too serious to happen by chance.

Wed, 06/13/2012 - 16:35 | Link to Comment JimBowie1958
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edit:  I left out selfish.

...and evil. Which probably makes him giggle behind his hand.

Wed, 06/13/2012 - 16:22 | Link to Comment TheGardener
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I take the pleasure of lumping you broiler into the green socialist category, the most dangerous and fascist minded
variety of socialism the world has ever seen.

Wed, 06/13/2012 - 17:43 | Link to Comment Hobbleknee
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You've been brainwashed to think that by public education.

Wed, 06/13/2012 - 14:09 | Link to Comment FeralSerf
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Are fines that are exacted on white collar criminals "FUCKING REDISTRIBUTION OF WEALTH YOU FUCK"?

Wed, 06/13/2012 - 14:20 | Link to Comment Harbanger
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Exactedly! Like fines for smoking r not a redistribution of health.

Wed, 06/13/2012 - 14:21 | Link to Comment aminorex
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And quietly pollinating at night is bee distribution by stealth.

Wed, 06/13/2012 - 14:49 | Link to Comment Harbanger
Harbanger's picture

Thanks for reminding me, I just went out and collected some honey.  btw- The only thing I see pollinating at night are moths.

Wed, 06/13/2012 - 14:10 | Link to Comment CommunityStandard
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From what I can tell, banksters have received more of the tax dollars than the poor.  All income taxes are theft, but not all taxes end up being redistributed.

Wed, 06/13/2012 - 14:20 | Link to Comment aminorex
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No, in socialism, the state owns the means of production.  In the U.S. system, the state owns the means of destruction.

Wed, 06/13/2012 - 14:28 | Link to Comment batterycharged
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Free markets are redistribution of wealth, I guess they are socialism as well.

Wed, 06/13/2012 - 14:30 | Link to Comment AnAnonymous
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What matters is US citizen economics, the rest...

Wed, 06/13/2012 - 17:22 | Link to Comment Umh
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Make that voluntary redistribution wealth and maybe not even that because each side of a fair trade got what they wanted.

Wed, 06/13/2012 - 18:40 | Link to Comment Buckaroo Banzai
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Wow-- way to go. Stupidest comment of the day.

There is a difference between distribution of wealth and REdistribution of wealth, fucknut.

Wed, 06/13/2012 - 18:41 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Wow-- way to go. Stupidest comment of the day.

There is a difference between distribution of wealth and REdistribution of wealth, fucknut.

Wed, 06/13/2012 - 14:52 | Link to Comment hangemhigh
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@BB

IT'S FUCKING REDISTRIBUTION OF WEALTH YOU FUCK.

the biggest wealth redistribution scheme in the history of the plane is the TBTF banking system...........it has consumed more than $20T in corporate welfare payments and is even now in the process of rigging elections and manipulating the media in an attempt to channel even more public money/subsidies into the hands of the looting class........

Wed, 06/13/2012 - 15:00 | Link to Comment pods
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Nevermind the interest skimmed by creating debt and loaning it out with interest over the last 100 years or so.

pods

Wed, 06/13/2012 - 15:01 | Link to Comment Hohum
Hohum's picture

So BB,

You want to live in an agrarian society?  Perhaps you can explain how the private sector will provide all the infrastructure and keep the starving masses (deserving or not, it doesn't matter) at bay.

Wed, 06/13/2012 - 18:43 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Hey shitbag, since when is the government a better provider of ANYTHING than the private sector????

Government does NOTHING competently. That's a FACT.

Wed, 06/13/2012 - 19:14 | Link to Comment Hohum
Hohum's picture

You do have a way with words.  Not much of a brain, though.

Wed, 06/13/2012 - 13:51 | Link to Comment Muppet Pimp
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After awhile one can really get the distinct feeling that CHS just hates capitalism in general.  Just another puff piece to draw the huff po crowd in.  Come on CHS, just say you hate rich successful people.  Go on, say it.

Wed, 06/13/2012 - 14:12 | Link to Comment CommunityStandard
CommunityStandard's picture

I wish the people who junked you would post why.

Wed, 06/13/2012 - 14:40 | Link to Comment We need Geronimo
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If by "successful", you mean those at the top of the money pyramid who buy laws and influence where others can't, yeah we do hate that. 

Wed, 06/13/2012 - 14:44 | Link to Comment Optimusprime
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Did you miss the distinction between productive (a la Steve Jobs) and parasitic made in the article?

Wed, 06/13/2012 - 15:04 | Link to Comment Hohum
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CommunityStandard,

I think CHS wants to reward wealth creators and doesn't think Romney is one of them.  What's so hard to understand, man?

Wed, 06/13/2012 - 15:23 | Link to Comment CommunityStandard
CommunityStandard's picture

In a functioning economy, investors play an important role.  They allocate capital to where it is most productive.  The wealth creators (entrepreneurs a la Steve Jobs) would not exist without financial backing, which is what the investor class is supposed to do.  Labelling investors as "parasitic" is actually anti-capitalistic and anti-rich people simply because they are rich.

Granted, there are plenty of parasitic investors.  It's just bad to generalize and claim that all investors should be taxed heavily.

Wed, 06/13/2012 - 20:21 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

 

 

+ a billion; of course the Huff Po crowd doesn't, nay *can't understand ...

 

(* There is no cure for stupid.)

Wed, 06/13/2012 - 18:16 | Link to Comment squeal
squeal's picture

I think what CHS said is clear enough and entirely valid. Wealth is sucked from the general population into the pockets of people who have no part in the production of any beneficial good or service. There is no reason anyone should support this form of (theft) capitalism, aside from those who actually benefit from it. I'd be willing to bet you are not part of that shrinking elite demographic, but are instead just another useful idiot.

Is it not completely, transparently obvious that money rules this country? Is it not obvious that the politicians supposedly elected by popular vote to respresent us do not in fact represent our interests? Is it not obvious that every action of this government is driven by corporate or military prerogatives? (with union prerogatives a very distant 3rd; to illustrate the relative power of the unions, see the recent Walker vs. Barrett recall election, with the 10 to 1 campaign contribution disparity)

Politicians in election campaigns can say that they are in favor of helping the middle and lower classes, but that message is only possible over airwaves monopolized by fewer and fewer mega-corporations, with air time paid for by the likes of Goldman Sachs, JPM, etc. These forces own the government, and their business is not to help the country in any way. Rather, their existence is dependent on the continued squeezing of the middle and lower classes. 

Wed, 06/13/2012 - 20:27 | Link to Comment CommunityStandard
CommunityStandard's picture

Everything you said about the political system is true.  I was questioning CHS's attack on the investor class.  There is a point to the investor class - please see my comment above yours.  And there is a solution to the problem of skewed investor incentives that doesn't involve ridiculous taxes - please see cougar's comment below.

Wed, 06/13/2012 - 13:54 | Link to Comment cougar_w
cougar_w's picture

There is no need to tax the parasitic rich. There is no need to touch their wealth at all.

Simply stop protecting them.

Once the word gets out that money doesn't buy security anymore then the parasitic rich won't last a day.

Wed, 06/13/2012 - 14:21 | Link to Comment MachoMan
MachoMan's picture

The reason there is a "parasite" class in the first place is because there is an insurmountable wealth gap, which has been utilized to entrench them in a money skimming system...  money will always buy security because that's what those in power dictate money will do...  you're arguing in an academic vacuum.  In the real world, the parasites become too entrenched to remove.  About the only solution appears similar to chemo...  in order to remove the cancer, we have to take lethal doses of chemicals and hope we manage to survive...  albeit without hair. 

 

Wed, 06/13/2012 - 14:45 | Link to Comment Optimusprime
Optimusprime's picture

Nicely put.  There will be no painless way through all this.

Wed, 06/13/2012 - 15:31 | Link to Comment DaveyJones
DaveyJones's picture

you're arguing different stages of remedy for the same thing. The collective vote of the consuming public is likely a more potent, but under utilized and less understood monetary weapon and influencing device. It is a lot more challenging to get it to act consistenly but when it does, very little can stop it.

Human nature and human history has never changed. Rules, like criminal rules, are often set up and more important, practiced anticipating the dark side of human nature and remembering lessons of the past. Over time, with the public lax, specific, growing powers begin to collect, influence, and corrupt the system. At some critical point, the cycle starts again. There are, however, a lot of very unique factors in this chapter in history - population, resources, environments, and the sheer global size of the criminal forces. That may produce a much larger explosion in this cycle 

Wed, 06/13/2012 - 17:58 | Link to Comment MachoMan
MachoMan's picture

The main problem I see with the boom bust cycle is the potential for total ruination.  Generally speaking, we manage to come out of credit cycles with a bunch of really neat technology and, generally speaking, higher standards of living...  however, there is always a risk that fundamental trust is irreparably broken...  and that we react in a way that sheds the gains from not only the previous cycle, but many generations of cycles...  with the manifestation of world killing technologies (nuclear power, deep well oceanic oil drilling, nuclear bombs, designer diseases, chemical weapons, overuse of pesticides and chemicals, etc.), each cycle carries additional risk...  additional risk of total ruination.

In general, I think we're net ahead with the stairstepping...  the problem is that there is a cost for this luxury.

Wed, 06/13/2012 - 16:07 | Link to Comment waterhorse
waterhorse's picture

Don't worry.  TEPCO has it covered.  Too bad the hosts will die as well.

Wed, 06/13/2012 - 20:14 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

 

 

MachoMan :

" The reason there is a "parasite" class in the first place is because there is an insurmountable wealth gap,  "

 

MAJOR fail on your part; your thesis is vapid and contradicted by real life.

 

'splain Michael Dell, Bill Gates, and the other new 'weath' these last two or three decades ...

 

 

 

 

 

Wed, 06/13/2012 - 14:59 | Link to Comment FeralSerf
FeralSerf's picture

For all of recorded history, and I suspect even before that,  money has bought security.  In fact it has always been  on the very top of The List of Important Things To Spend Money On.  It's silly and nonsensical to suggest that the parasitic rich would ever have it otherwise unless they somehow get a sudden desire to commit suicide.

The Parasitic Rich used to need to pay for some of this protection themselves.  Now, with the advent of paper money,  the proles get to pay for the Parasitic Rich's protection instead, both in lives and treasure.

Wed, 06/13/2012 - 14:06 | Link to Comment disabledvet
disabledvet's picture

Apparently taxing money itself is socialism. "of two minds" discovers his Singularity...

Wed, 06/13/2012 - 22:31 | Link to Comment RiverRoad
RiverRoad's picture

Not to mention the money the Parasitic Financial Elite send to tax havens.  They've bled Europe dry.  Oh, and we're expected to pour them a refill...

Wed, 06/13/2012 - 14:03 | Link to Comment Thomas
Thomas's picture

Kevin Phillips covers the "financialization" of empires in decline in American Theocracy. We are in the classic death rattle phase of empire. Discussions like this of financial elites, while warranted, are also likely to be symptomatic. Sharpen up the guillotines because, as Edmund Burke prophesized about the Frend Revolution, "This motherfucker is gonna get murderous before it's over." (Some liberties taken with translation.)

Wed, 06/13/2012 - 14:51 | Link to Comment New_Meat
New_Meat's picture

"UK and US: two countries separated by a common language." -Winston Churchill

Wed, 06/13/2012 - 13:52 | Link to Comment duo
duo's picture

Calling Romney a parasite is an insult to ticks and tapeworms.  A parasite doesn't usually kill it's host as quickly as it can.

Wed, 06/13/2012 - 16:23 | Link to Comment Harbanger
Harbanger's picture

Until he becomes President, it's still Bush's fault.

Wed, 06/13/2012 - 17:47 | Link to Comment Zero Govt
Zero Govt's picture

can i chip in the huge contribution the left has made to economic contraction, social ignorance and fucking everything up?

Bumma is the biggest debt-spending junkie the planet has ever known

Wed, 06/13/2012 - 18:37 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Zero Govt said:

Bumma is the biggest debt-spending junkie the planet has ever known

That's been true of every president in living memory.

Wed, 06/13/2012 - 20:25 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

 

 

-1

 

Born yesterday?

 

 

Wed, 06/13/2012 - 20:24 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

 

 

 

Zero Govt :

" can i chip in the huge contribution the left has made to economic contraction, social ignorance and fucking everything up? "

YES YOU CAN 

 

 

Wed, 06/13/2012 - 13:58 | Link to Comment greyghost
greyghost's picture

charles..thank you for this article. as much as i am freighten by the little commie in the house without color, romney scares me more, parasite is the correct term for his business model. just look at the good little toady republicans in front of their master the great jamie dimon....."isn't hedging a vital business fuction". jamie: first i want to thank you for the fluff question and the chance to answer that senator moron "yes, that is why we have created over $700 trillion worth of these products. that and the bonuses aren't too bad either.

Wed, 06/13/2012 - 14:19 | Link to Comment Fail2Deliver
Fail2Deliver's picture

Probably just another racist/homophobe/unpatriotic/terrorist if you dont agree with Obama

Wed, 06/13/2012 - 15:20 | Link to Comment LMAOLORI
LMAOLORI's picture

I trust obama will spread the wealth to his cronies Spreading The Wealth Around

 

http://www.zerohedge.com/news/guest-post-spreading-wealth-around

Thu, 06/14/2012 - 00:43 | Link to Comment JOYFUL
JOYFUL's picture

Actually, it's worse than that! = the title and indeed the whole premise of this article turn facts and reality upside down...

the real puppetmasters in this storyline would snuffle with laughter at the idea of their 'paying taxes'...

not only do they not pay taxes, they collect the taxes of the dupes who do, then use the stolen proceeds to buy further enforcement for the fencing used to keep everything in good order...

its called 'tax farming' and they bin at it since at least the days of the Pharoahs...and now that they have placed their own phony pharoah in the WH, the livin has got even easier...

Wed, 06/13/2012 - 13:42 | Link to Comment ACP
ACP's picture

Of course they don't.

And the one party that has fooled morons into thinking they want to raise taxes on the wealthy, simply doesn't pay them and gets away with it.

Geithner, Daschle, who else?

Wed, 06/13/2012 - 13:51 | Link to Comment Zionist Jew
Zionist Jew's picture

The income tax was implemented to service the debt Governments incur through central banking.

We don't pay tax because we own the central banks, and write the tax laws.  Don't like it?  Move to Somalia bitchez!

 

"Give me control of a nation's money and I care not who makes the laws."

Wed, 06/13/2012 - 14:50 | Link to Comment Optimusprime
Optimusprime's picture

Absolutely correct on the first sentence.  This should be taught in any self-respecting school by sixth grade, and made more incisive and analytically complete in all later history curriculum.

 

But wait--just who controls our educational establishment?  Oh, well, never mind.

Wed, 06/13/2012 - 15:40 | Link to Comment Zionist Jew
Zionist Jew's picture

The Rockefeller Foundation in it's infinite generosity, contributes a great deal to our public educational system.  One of many reasons our Educational system is the envy of the world.

Wed, 06/13/2012 - 20:43 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

 

 

-1

 

Overly broad statement really meaning nothing; gum flapping; aural masturbation; malfeasance on a keyboard; public display of un-intelligence; third-rate conspiracy hackery; mindless repetition of 'Bircher' literature (from the fifties no less); ill-informed populist opinion.

 

Did I catch them all?

 

 

Thu, 06/14/2012 - 05:52 | Link to Comment Ar-Pharazôn
Ar-Pharazôn's picture

Envy? really? well i live in switzerland and i never payed for school or high school.

Wed, 06/13/2012 - 13:52 | Link to Comment Moe Howard
Moe Howard's picture

Inside trader Buffet own carloads. Hope he drowns in diet coke.

Wed, 06/13/2012 - 14:11 | Link to Comment smithcreek
smithcreek's picture

"If we cannot grasp the difference between parasitic wealth and legitimate value/wealth creation, then we are well and truly lost."

Apparently CHS did not "grasp" what the article he quoted talked about.  As a candidate for pres, Mitt Romney tied to all the Wall St. money makes me ill, but the article CHS quotes explicitly speaks about parasites that benefit from positioning themselves in the stream of government money and prinitng.  Mitt Romney did business in the private sector.  So instead of just reading any article and trying to make it fit the "I hate Mitt" mold, why find a legitimate reason to hate him?

Wed, 06/13/2012 - 14:36 | Link to Comment economicminor
economicminor's picture

From what I understand, Bain Capital used huge amounts of borrowed money at reasonably low interest rates to buy the companies that they then *re-organized*.  They used the equity of the assets being purchased for collateral. That is akin to buying huge on margin. The majority of us never had access to that. So in effect, Romney and Bain were at the top of the food chain which allowed them to capture massive profits with no skin in the game. They could not have done this with out insider access and that makes them only a very small, insignificant step away from the actual Banksters themselves.

Wed, 06/13/2012 - 16:07 | Link to Comment GeezerGeek
GeezerGeek's picture

You did not address the issue posed by smithcreek. Can you provide instances of Bain using government money to get richer? Just being at the top of the food chain, as you put it, should not be considered reprehensible. Is not Apple at the top of its food chain? Or Google? Or Intel?

Up until last August I worked for a company that was rescued by Harbinger Capital. The incompetent management had put it on the brink of insolvency. Harbinger rescued it, combined it with another failing company in the same industry, and later merged it into a third company. That was several years later, so I can't complain because I, and lots of other ordinary folks, benefitted. The head honcho, one Phil Falcone, was less that sterling (I hate borrowing a phrase from Slick Willie), and tried using his political connections ( a Friend Of Obama - FOO) to enrich himself. Look up LightSquared, a company that came close to screwing up GPS systems. That, using political connections for favors, is parasitism. Big difference.

I'll check back later to see instances of Romney/Bain engaging in similar parasitic acts using government money and/or connections.

Wed, 06/13/2012 - 18:06 | Link to Comment FeralSerf
FeralSerf's picture

.

"Can you provide instances of Bain using government money to get richer?"

PBGC to bail out pensions after he had his mittens -- they don't call him "Mitt" for nothing -- in the employee pension funds.

Below market interest thanks to the Fed and investment banker and political contacts.

Wed, 06/13/2012 - 19:07 | Link to Comment smithcreek
smithcreek's picture

They borrowed money and used the assets as collateral?!?!!  Evil!!!  So, how does a mortgage work?  Again, I don't like Romney and his apparent relationship with Wall St., but the silly notion that he went around destroying perfectly good and profitable companies is pure ignorance and a lack of understanding how creative destruction in a true capitalist system works.

Wed, 06/13/2012 - 14:51 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

Wow... 8 red arrows so far....

8 elites reading ZeroHedge today....

Good for you('s) Tyler(s).

Wed, 06/13/2012 - 16:09 | Link to Comment Djirk
Djirk's picture

if the spineless bought off politicians had any balls, this is brutally simple.

Payroll and other tax breaks for companies growing and adding jobs. Offset by taxes on capital gains, interest and rents.

Then those creating value are rewarded and those collecting "rents" without adding value would be penalized.

Net would be growth, those with capital would still chase rents despite a higher fee/lower return. Those creating jobs would have more money for expansion. capisci?

Wed, 06/13/2012 - 17:34 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

"if the spineless bought off politicians had any balls"

I'm pretty sure the last vestiges of said politicians were killed off back in the 60's, with periodic executions of the more uppity among them just to remind the others that they, and the plebs they deign to represent, are indeed the bitch in this situation.  

Anyone thinking that "throw the bums out" is going to result in anything is tilting at windmills (as our Spanish friends can attest to recently).  The way to actually fix this starts with you.  Unplug from the system to the greatest extent possible.  That is the only solution.  Starve the beast.  Encourage and assist others in doing the same.  

Wed, 06/13/2012 - 17:25 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

It's weird that he read this and came to that conclusion.  The entire post he's commenting on had to do with the fundamentals of our power structure, and Charles decided "yeah, the solution is targetted income taxes!"  Jesus fuck almighty is he still deep in the cave.

Wed, 06/13/2012 - 13:25 | Link to Comment VonManstein
VonManstein's picture

nej

Wed, 06/13/2012 - 13:39 | Link to Comment 5880
5880's picture

I don't

but you should

Wed, 06/13/2012 - 13:27 | Link to Comment Hamsterfist
Hamsterfist's picture

This will be interesting......

Wed, 06/13/2012 - 13:52 | Link to Comment CPL
CPL's picture

No it won't, nothing will be done about it and politically nobody cares because they are all busy covering their asses.

 

There was an article on here a couple of months ago about Working millionaires with skin in the game that was well laid out.  It might have been James or Cognitive Dissonance...or maybe Bruce.  Either way it was a well thought out discussion on working millionaires.

 

Wed, 06/13/2012 - 13:28 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Thank you for citing the differential between the "parasitic rich" and the "legitimate rich."

Wed, 06/13/2012 - 13:50 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

No cite for the differential between the "parasitic poor" and the "legitimate poor."

Traditionally, has it not been employment status?

Wed, 06/13/2012 - 15:02 | Link to Comment batterycharged
batterycharged's picture

I see, so a blind, elderly woman that can't work isn't legitimately poor.

GOTCHYA.

Yeah, cause everyone has the same opportunities to get a job that Mitt Romney has, right?

Wed, 06/13/2012 - 14:04 | Link to Comment Thomas
Thomas's picture

Indeed. There are rich guys who elevate those around them on their way to wealth.

Wed, 06/13/2012 - 14:26 | Link to Comment CPL
CPL's picture

A pirate ship is only as productive as the capitan sharing the booty

Wed, 06/13/2012 - 14:27 | Link to Comment MachoMan
MachoMan's picture

True, but unfortunately pitchforks tend to not be able to differentiate.

The mob mentality that confiscates the wealth of those who benefit their surroundings is the same moral corruption that leads inevitably to despotism.

In the end, we tend to choose to live under the control of narcissists and sociopaths...  simply because we are risk averse and their actions are easier to calculate...  mobs on the other hand are...  difficult to calculate at best.

Wed, 06/13/2012 - 13:28 | Link to Comment Seize Mars
Seize Mars's picture

Negative.

The tax is parasitic skimming, enforced by thugs at the behest of sociopaths.

So in order to stop the parasitic skimming, enforced by thugs at the behest of sociopaths, then stop the taxes.

Wed, 06/13/2012 - 13:32 | Link to Comment Blue Dog
Blue Dog's picture

In other words, you arbitrarily decide who the good rich are and who the parasites are. Sounds legit.

Wed, 06/13/2012 - 13:59 | Link to Comment Seize Mars
Seize Mars's picture

Incorrect. What I mean is that coercion is the problem.

Nobody has a right to shake down anyone else.

Nobody has a right to assign who the good rich are and who the parasites are. No one. No one gets to take anything from anybody.

Every transaction is voluntary.

Wed, 06/13/2012 - 14:26 | Link to Comment aminorex
aminorex's picture

"Every transaction is voluntary" is patently false.  From a false premise any arbitrary conclusion can be drawn.

Wed, 06/13/2012 - 15:34 | Link to Comment Seize Mars
Seize Mars's picture

No, knucklehead. I meant "ought to be" for "is."

Every transaction between people ought to be voluntary, in my ideal.

 

Wed, 06/13/2012 - 17:52 | Link to Comment Zero Govt
Zero Govt's picture

Correct ....but we already make our own decisions, so no need to wait for your ideal

the only part of our financial transactions and indeed personal freedoms that is not ideal (voluntary) is that which the Govt forces upon us. Which is why we should take another voluntary decision:

Stop Paying Taxes ...cut the parasite off

Wed, 06/13/2012 - 13:29 | Link to Comment vmromk
vmromk's picture

Nothing that a guillotine couldn't fix.

Wed, 06/13/2012 - 13:55 | Link to Comment junkyardjack
junkyardjack's picture

"The man who passes the sentence should swing the ax" -Ned Stark

Wed, 06/13/2012 - 14:57 | Link to Comment Stackers
Stackers's picture

That didnt end up working so well for the French.

Wed, 06/13/2012 - 13:34 | Link to Comment Stackers
Stackers's picture

Remember this the next time you hear some CEO "taking one for the team" by only taking $1 in salary that year ........ (and $30million in stock options that they pay no ssc, medicare or payroll tax on)

Wed, 06/13/2012 - 13:57 | Link to Comment azzhatter
azzhatter's picture

The parasite bankers never use that one. The one dollar is insulting to them. That fucktard at Ford pulled that one off beautifully $1 salary and then $147 million in "compensation"

Wed, 06/13/2012 - 13:29 | Link to Comment ghengis86
ghengis86's picture

Who enforces this tax?

Fail. Fail. Fail.

Fuck taxes. Fuck the state.

Wed, 06/13/2012 - 13:30 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Yawn. Another stupid fix-the-symptom solution. How about we eliminate income taxes all together...and then actually fix the system by abolishing the Fed, restore a Real Bills clearing system, and eliminate 98% of federal spending.

Wed, 06/13/2012 - 14:16 | Link to Comment FeralSerf
FeralSerf's picture

.

". . . eliminate 98% of federal spending."

I presume this means that you advocate a 98% reduction in military spending as well?  Works for me.

Wed, 06/13/2012 - 13:30 | Link to Comment kito
kito's picture

good ole charles, skinning the same cat a thousand ways................

Wed, 06/13/2012 - 15:13 | Link to Comment Sophist Economicus
Sophist Economicus's picture

And poorly too.   Wonder if Ball players, actors, musicians,etc create real wealth in his definition.    Wonder if they should be taxed at the 99% rate since they did not create real wealth.

 

I know, maybe we can have a Real Wealth Czar!   Appointed by the president, with a team of politicos.   They can hear cases and pass judgement on what constitutes real wealth.   We can add a sliding tax scale too.  Lots of shades of gray ya' know...

God, I cannot wait for the crash - at least these navel contemplators will shrivel up and die....

Wed, 06/13/2012 - 13:30 | Link to Comment TrainWreck1
TrainWreck1's picture

Who decides the line between producer & parasite?

I know more than a few 'serial entrepreneurs' who leeched of the development teams, flipped the companies, and stiffed the people who did all the heavy lifting.

I'm not buying the author's argument. Closest thing to fair is flat tax, no exceptions, no deductions.

Best long-term solution is to move tax day from April 15 to the day before November elections.

 

Wed, 06/13/2012 - 13:46 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Yay.  $10,000 Earned Income Tax Credit for everyone!

Wed, 06/13/2012 - 14:10 | Link to Comment Joe Davola
Joe Davola's picture

Is it innovative or parasitic if Apple enables 3rd party transactions through iTunes and then skims a fee for each one?

Wed, 06/13/2012 - 14:14 | Link to Comment AnAnonymous
AnAnonymous's picture

Be a good US citizen. Join the right group.

The difference between parasitic and productive is a joke in itself due to US citizen economics.

Wed, 06/13/2012 - 14:55 | Link to Comment WTFx10
WTFx10's picture

STFU

Wed, 06/13/2012 - 14:29 | Link to Comment aminorex
aminorex's picture

Closest thing to fair is monetization and inflation.  Do you really want fair?

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