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Guest Post: Do The Parasitic Elite Pay Any Taxes?
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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"Best long-term solution is to move tax day from April 15 to the day before November elections."
This, plus no "pay as you go." No deductions in every paycheck. You pay your total tax bill all at once. Kind of a slap in the face to make people realize just how much they are paying. The exact opposite of getting a refund and feeling so good about it. When this subject comes up, I always ask them how they feel about giving the government an interest free loan for a year.
Since free market capitalism is dead and has been replaced by parasitic kleptocrats and oligarchs -these ticks, fleas, bedbugs, and tapeworms of society need to be removed.
Allowing failure and enforcing the rule of law would be a good start.
Elimination of off-shoring of profits and private Cayman island accounts wouldn't hurt either.
A flat tax and a three page tax code too.
No middle class = banana republic
The Cayman Islands are chump change accounts compared to those in Israel.
It's interesting how well the Zionists have deflected criticizm on secret accounts to the Swiss. If one is a member of the tribe, a secret account in Tel Aviv is protected by nukes as well as local law.
Hear hear - but who watches the watchers? You can't legislate human nature, and we ain't got angels to deal with here.
There would surely be a loophole, on purpose or by accident. Leeches will be leeches.
Sounds like the unsual liberal class warfare garbage.
http://www.csmonitor.com/USA/2011/0415/Taxes-and-the-rich-How-much-do-th...
To put it in numbers, according to the analysis, the top 1 percent of earners account for 20.3 percent of total personal income in the United States and pay 21.5 percent of all federal and state taxes.
Every person earning a wage or dividend from an industry on the federal, state or local government's teet or made viable by compliance or other regulation of those entities is a parasite. The vast majority of people earning a paycheck aren't productive.
The parasitic elite are those that consume more government resources than they contribute, so, no, they do not pay NET taxes.
Anything too big to fail is a sovereign power.
The real question is, "Who is subordinate to whom?"
A rigged game is hard to beat unless your on the inside. So yes - we're all screwed.
Mhh what if interest rates were 10% ? What if the banks that loaned a lot of money to the private equity schemes failed ? WOuld there be more money for leveraged buyout ? NO... Lets get the free market first and then we can assess. This is like putting the cart before the horse
Do that and they will simply multiply the abuses by 100 to make up the difference.
The parasites will merely take their wealth and put it to good use.
Regulatory capture.
Then their parasitism will be declared legitimate.
As soon as you come up with a scheme to turn the screws on the banksters, they turn it around on you.
Same as it ever was.
pods
Smith
your conversion to Marxism is complete. You may now quit blogging and just quote Marx.
Well, he is in Hawaii. Everybody pisses and moans about CA, but Hawaii can hold its own as a socialist workers paradise.
The host cannot get rid of its own parasites. The host must eventually die and take the parasites with it.
That's why the elites are moving heaven and earth right now, they are trying to keep the host alive.
It's not working, guys.
Resolve therefore to perish.
"It is not a question of my own mortality, it is a question of quantity. The quantity of those who think themselves superior or more worthy for whom I can answer unequivocally any question they may have regarding their own mortality." Unknown
Bingo. The host is comatose and its muscles are atrophied. It has no ability to pull the parasites off.
We can all argue about solutions until we're blue in the face. None will be implemented. It's a futile effort.
Notice however that it becomes a self-limiting problem.
The elites killed the host. Because that is what elites do. They have no choice but to eat from the host as much as they can, and their ability to eat increases exponentially over time because they can change the eating rules and the physics of digestion to enhance their intake. Eventually they devour the entire universe of money, and doing so they die.
Problem solved. Give it a year or a few. But the problem will be solved.
Made me laugh.
In US citizenism, the king class is the middle class.
Might make your statement right, by the way.
Made me yawn. - Ned
STFU
As long as the 'parasitic elite' still get the hot chicks nothing will change.
I was sittin out on the porch
Rotten old tax man came
He said you owe me money
I said "fuck you, go away."
Lauren Hill is that you?
Failure, destruction, hardship and pain should be enough of a "tax". The trick is to allow the financial elite to experience such things.
Yes, and does cranky Charles get to decide who is a parasite and who is not, what constitutes parasitism and what does not?
I would say that Charles has a good idea. A good idea that would result in more hardship for those who do not have the ears (and know the dirty secrets) of the lawmakers.
You cannot hope to fashion a law to corral the corrupted moneyed class, as they are the ones who write the rules.
pods
I liked the article. No one will give me the solution so I'm going to provide one myself through the unification of like minds. I'm taking the dog for a walk.
Great blog post, and I believe most of us know the answer to that question!
The Abomination of the Obama Nation
--- No excuse left not to vote Green ---
This year it was announced that “progressives” met at the Netroots Nation.
Well, whatever those limousine neoliberals wish to call themselves, progressives they ain’t! ! !
One of the main speakers there was Wall Street revisionist stooge, Van Jones, who appears to have his head permanently affixed up his butt.
Jones has lately been claiming that “we” (always love those self-appointed who claim to speak for the rest of us) never pressured President Obama enough, never protested enough, etc., etc.
Negative on that bullcrap, Van Jones! (Yours truly, alone, protested directly to the White House over a thousand times, in calls, letters, emails, and various protests.)
Jones also prattles on about cap-and-trade; either Jones is a complete idiot who still doesn’t comprehend that Wall Street scam, or he’s even more of a turncoat than he appears?
Whomever Jones really speaks for – Wall Street, the DLC, Jamie Dimon, etc., he speaks for very few Americans today!
Obama of the collateral death by drones!
Obama of torture and preemptive arrests of protesters!
Obama of the War on Whistleblowers!
Obama the silent on Wisconsin, Michigan, Indiana, Ohio and Florida (AND Honduras AND Bahrain)!
Obama who has kowtowed to the Wall Street banksters at every opportunity!
Obama and his attacks on due process and habeas corpus!
Obama who has continued to offshore America through more “free trade” agreements and the Trans-Pacific Partnership!
There is no “lesser” bullcrap anymore!
The most nauseating sight was to watch those “business union” members in Wisconsin cheer Bill Clinton – Clinton who did to Arkansas what Walker is doing to Wisconsin!
Union members my butt!
They wouldn’t know of the sacrifices of the McNamara brothers and Alexander Berkman; the Ludlow Massacre, the Haymarket Massacre or the many women who died so needlessly and horribly in textile sweatshop conflagrations in early 20th century America!
They wouldn’t know why National Guard armories were strategically positioned around the nation to violently respond to labor strikes!
Only the most ignorant, the most uneducated, or the most amoral, would ever refer to Bill Clinton, Hillary Clinton and Barack Obama as democrats or progressives --- they are Wall Street stooges through and through.
Why vote for the lesser when we can vote for the best?
Dr. Jill Stein for president in 2012!
THINK. . . . and vote Green!
[Note to whiners who always bring up future Supreme Court choices – you might want to take a close look at Kagan’s and Sotomayor’s record since they’ve been on the bench --- your argument doesn't wash.]
You're a retard for trashing Walker. Do you not conprehend the difference between a private union and a public union?
What's the point? a union is a union is a union - cops and firefighters can suck it just as much as the teachers and the UAW AFL/CIA can suck it.
At least private union pensions are not directly taxpayer funded, but only not directly.
Green Party = "Thoughtful" Gun Control = Epic Fail.
Green Party = Illegal Immigrant Amnesty = Epic Fail.
Green Party = Legalize Cannabis - but with full .gov "control and regulation" = Epic Fail. (Should be legal like a tomato plant is legal.)
Green Party = cede sovereignty to UN = Epic Fail.
The only good thing they want to do that I can see is get rid of NAFTA and WTO. Other than that they are statist control freaks.
Hat tip to Coolio and Wierd Al!
As I walk through the valley of the shadow of debt
I take a look at my wealth and realize there's not much left
coz I've been borowin and spendin so long, that
all but Obama thinks that my cash is gone
but I ain't never crossed a bankster that didn't deserve it
me be treated like a punk you know that's unheard of
you better watch how you're talking, and where you're walking
or you and your Jamie’s might be lined in chalk
I really hate to trip but i gotta, loc
As I Grow I see myself in the pistol smoke, fool
I'm the kinda G the little homies wanna be like
on my knees in the night, saying prayers in the streetlight
been spending most their lives, living with a banksta parasite
been spending most their lives, living with a banksta parasite
been spending most their lives, living with a banksta parasite
been spending most their lives, living with a banksta parasite
They got the situation, they got me facin'
I can't live a normal life, I was tazed by the stripes
so I gotta be down with the punge team
too much television watching got me chasing dreams
I'm an educated fool with money on my mind
got my 10 in my hand and a gleam in my eye
I'm a loc'd out gangsta set trippin' banger
and my homies is down so don't arouse my anger, fool
foreclosure ain't nothing but a heartbeat away,
I'm living life, do or die, what can I say
I'm 23 now, but will I live to see 24
the way things are going I don't know
Tell me why are we, so blind to see
That the one's we hurt, are you and me
been spending most their lives, living with a banksta parasite
been spending most their lives, living with a banksta parasite
spending most their lives, living with a banksta parasite
spending most their lives, living with a banksta parasite
Power and the money, money and the power
minute after minute, hour after hour
everybody's running, but half of them ain't looking
what's going on in the fed, but I don't know what's Bernankin
they say I gotta learn, but nobody's here to teach me
if they can't understand it, how can they reach me
I guess they can't, I guess they won't
I guess they front, that's why I know my life is out of luck, fool
been spending most their lives, living with a banksta parasite
been spending most their lives, living with a banksta parasite
spending most their lives, living with a banksta parasite
spending most their lives, living with a banksta parasite
Tell me why are we, so blind to see
That the one's TARP hurt, are you and me
Tell me why are we, so blind to see
That the one's TARP hurt, are you and me
double post
Quit feeding the parasites, pull ALL your wealth from the banks/paper market, quietly evade AS MUCH taxes as you can and for god sakes stop shopping at Wal-Mart for thingimajigs.
Tax earned icome at 2%, tax capital gains at 80%. Retirement should be granted for a lifetime of hard work, not a bet made on some piece of paper tied to a ponzi scheme.
80%? I guess the idea of entrepreneurship and reward isn't of interest to you. I kind of like the entrepreneur who takes a low salary, plows earnings into the business, builds it and sells it for just rewards after cultivation.
Forget income taxes! All taxes should stem from consumption, exempting food, and shelter/clothing a defined limits. When you do that, you align the drivers of the need for taxes with the sources of taxes. The "rich" would pay more not because they're earning more but because they're taking money from production and savings and putting it into consumption
Without income taxes, hundreds of billion of dollars would be redirected from counting and enforcement into productive endeavors.
Great idea! And when all those hard working people invest for their retirement, instead of putting their money in stupid paper ponzi bets like "stocks", "bonds", "real estate" and "precious metals" they can bury it in a treasure chest!
Idiot.
And if you saved your lifetime of hard work is saved in equities, you should pay 80% on capital gains? Oh, nevermind. Capital gains are so 70's.
Agree with everything except pegging capital gains at 80%. You are affectively removing the ability of the hard working middle class to move ahead through wise investment. It should be no capital gains up to a value of 1000oz of gold purchasing power (depending on its purchasing power after this mess). After that incrementaly tax more (20%, 40%. 60%) on each additonal 1000oz of value that way everyone can have a nice piece of the pie as well as contribute and encourage capital investment.
Fuck you, Paul! Why should there be any limit to how much a person can produce or earn? Why should we disincentivize capital creation and the increaess in productivity it brings? No. There should not be any income tax whatsoever. If we had a constitutional government, with constitutional money, we wouldn't need an income tax.
Calm yourself, no need to attack me with an expletive and please re-read the original post and then my reply post. I didn't say anything about income tax. I proposed a solution to capital gains tax that I thought would be a hell of a lot better then a flat 80% for everyone proposed by the original poster. My solution proposed would allow for the middle class to be comfortably well off and get ahead while diverting the massive gains from the stupidly filthy rich back into social and economic programs.
I gave ya green vote simply for being civil, and I like Dune.
If gold is money, and history strongly suggests that it is, there cannot logically be a "capital gains" tax on it unless it somehow grows in mass while in storage.
As an example, if prices go down in dollars, is it reasonable to "capital gains" tax those dollars that one has in one's mattress soley because they have greater purchasing power?
I agree 100% there should not be capital gains tax on silver and gold. I used gold as a measuring stick of capital gains acquired elsewhere instead of fiat for reasons we all know to well.
There should be no taxes whatsoever on gold/silver transactions of any type. That would be like my bank charging me sales tax to change a $10 for two $5s.
Probably the most stupid idea I've heard today and that's saying something.
Thinking like this is the reason why you'll never get rich.
Most people in the private sector don't have a pension so one has to save his own money considering Social Security will be broke after the boomers retire. Your 80% tax will kill any hope for having any money to live on in retirement. Or I guess you, like the head of AIG, are advocating we work well into our 80s?
.
How stupid.... Zero is bottom fishing with this post....
Another post about the guaranteed QE3 next week will soon follow, followed by a guaranteed QE3 for July when nothing comes in next week...
Experiment tends to show there is no such bottom for US citizens.
STFU
How else would Dimon payoff Schumer. The only democRat who didn't atleast put up some line of questioning. Senator Fuck Schumer.
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.
Or, perhaps, just maybe, they exceed the logical ability of a 2 year old. Does this guy have any idea what an investment bank does? Rhetorical question, obviously (answer: no). So, tell me CHS, you towering genius of a man, how would you suggest a hospital get $2,000,000,000 to build another hospital? Magic unicorns? Genies? Powerball?
Why does this idiot keep getting guest posts?
(better question, why do I keep reading them....)
I partially agree with you. Charles Hugh Smith understand the problems, and points them out corretly, but then completely bungles the solutions.
Terrible idea, absolutely pathetic. Big govt wins and the people lose. Typical mindless liberalism.
I'm confused I thought the only value in society was gold so value can't be created and society is just one big circle jerk? Everyone is a leech on the system because no one creates value so why single out the financiers?
Charles Hugh Smith,
you were doing well there differentiating between the productive rich and parasitic rich but you don't get anywhere, or any Brownie Points, until you ditch the ultimate parasite: Govt
you simply want to re-arrange the deckchairs (tax code) but not address the ultimate parasite in society, off which all other thieiving scumbags hang, the State
Govt (monopolising power in society/economy) is the exact opposite of freedom (free to self determination and compete).. Govt is the enemy of freedom, enemy of the free market and enemy of both intelligence and change (i'll explain sometime).
This weapon of economic and social destruction is financed by society (clever eh?) and wielded by the parasites. Kill Govt and all this cheating rotten slothful fruit hanging off it wilt and die too.
Allow Govt to live and the parasite cancer spreads again. You've got to solve the problem, not the symptoms
Stop Paying Your Taxes ...don't feed the parasite/s
I think you have this backwards. Government is the ultimate tool of the Parasitic Rich. It is not the Ultimate Parasite itself. For the True Ultimate Parasite, think Rothschilds and their tribe. They have historically used government and its weapons to exact their tax on society.
spot on
Govt is the window dressing for the real parasites who load parliaments with their sock puppets
some are very dull sock puppets, like the British Prime Minister and the US President, others are pumped full of anti-depressants because they're truly deranged tossers, like the previous British PM, Gordon Brown
but sock puppets they all are and you have named one of the puppet masters
Exactly right. Government is the tool of the ultimate parasites: The rent seekers. Those who can't produce value and need the government (i.e. the Power of the State) to mandate or subsidize the purchase of their product.
People who put their wealth at risk in order to create even more wealth are not parasites.
The French Revolution comes to the threaters near you thanks to the Third Estate?
LOL. All the right wing selfish pigs on ZH are full of rage. So I also nominate this as post of the year.
i thought it was the left that were the "selfish pigs" ? ...the lazy arsed tossers that want to thieve other peoples money and not work for a living yes? Spread the wealth (socialised theft) around and get this, they think they're on the moral high ground too!!!
my how idealism tricks a fool
The problem with Socialism is the you soon run out of low income earners to tax.
the problem with socialism is you replace the rich who have earned their wealth with a bunch of high horse riding ignorant tossers that know nothing about anything ...the train wreck for your society is then not very far away (see USSR, Cuìommunist China, North Korea or any 3 terms in power of the British Labour Party, Greek Socialists etc etc)
If that could be true... But US citizens know something, they know how to consume.
This is why we never get anywhere in this current paradigm, same old left/right political bashing divide and conquer....
AnAnonymouse - The Chinese are the second largest and fastest growing consumer society in the world. Period.
Soon, they will leave the rest of us behind.
http://www.forbes.com/sites/helenwang/2012/01/11/china-to-become-the-worlds-largest-importer-by-2014/
So, blame the Chinese for fabricating all the current junk that would not be consumed so much but for cheap Chinese copycats, and blame the Chinese for all the future junk.
The main reason to replace "the rich who have earned their wealth" is that no one can find them. I suspect they all moved to Chile.
Both ends are shit for brains and those in the middle can't seem to see through that.
Red is blue, up is down, doesn't matter who the fuck is running THE SHOW, only those of us who see the shadows on the wall for what they are can see that the everything is same as it ever was and forever will be until those in the middle wake the fuck up and realize demorepublicans serve the same masters.
In US citizenism, the middle class is the king class.
Demorepublicans have the same master: the US citizen middle class.
Indeed, as the resources of the world are dwindling and are less and less enough to maintain the US citizen middle class, some are slowly slipping out of the bowl and see in this an effect of US citizen government not serving the middle class.
But nope, in US citizenism, the power is decentralized: there is no longer unity between the actual holder of the power (US citizen middle class) and their puppet in charge (US citizen representative class)
Kings have that unity and are a centralized figure of power. US citizen form of government? Nope, decentralized form.
STFU
AnAnonymous said:
I see you're posting from the opium parlour again.
Wow, that's some bender you're on downthere. People's Liberation Opium Parlour intoxitizenicationism is the best.
Only success that benefits our commune as a whole will be tolerated here Comrade Bitchez.
Is Tyler trolling?
Again Charles with a statist solution.Who is he to determine who is a parasite and who isn't? Who is he to decide that somebody else should be taxed at 99% while another is taxed at 20%. Charles did it ever occur to you that it is statist policies that lead to this behavior? How about we elimnate the fed and these artificially low rates that help stimulate these kind of actions? How about reducing the other parasite in the system who produces nothing known as the federal government?
Charles says, "If we cannot grasp the difference between parasitic wealth and legitimate value/wealth creation, then we are well and truly lost."
The only person i know that has ever explained it is myself as you can't find it any book, dictionary or from any expert/scholar. I'd be interested in his definition/understanding
Another acolyte of the Messiah Obama in phoney outrage. Private Equity that focuses on restructuring takes risks and succeeds and fails. The Statist Thugs at the IRS, Treasury, The SEC, and The White House fix the deal so Auto Workers and Bankters continue to fund their political machine. Dodd-Frank Instutionalizes Crony Capitalism by creating a regulated series of private clubs that reap and plunder the upside and have the taxpayer pay for the downside.
Having made products in a high precision factory and developed software for a series of complex solutions to difficult problems with a clear view that making this is hard in both cases the risk of failure were also high. Failure, however, eventually creates better innovations and better companies.
Government causes and enables a super majority of our problems. Coercive policies that punished lenders that did not make rediculous home loans that were bound to fail. Regulations that create more Beauracracy and insulated the regulated from competition. Old age payments and Medicare obligations that can never be met but whose existence is solely for maintaining power. All are just a few of the problems caused by government.
Hold politicians and government workers to the same regulations they place on everyone else with their prison terms and fines at least double whata private citizen would suffer. They also must also go to the most stringent prisons with no parole or pardons.
If any groups should be taxed at 90%, it should be politicians, government workers, government vendors and any company or individual that receives more than 30% of their revenue as companies and 20% of gross income as individuals from government. Government Pensions should be only paid at 70 years old and not amount more than 25% of income made. Otherwise, the Government worker can have a 401(k) instead.
No firemen, well they started out a workers for private companies called, Fire Insurance Companies. Today Firemen respond to calls that deal with fires less than 8% of the time. Make the insurance companies responsible again. It was the Insurance Companies that paid-off the politicians to take over their largest cost.
"Police protection" means their pensions. They show up after the crime has been committed and with all the police we have, the US still cannot stop drugs. That means there is too much money breing made and the corruption is widespread and high up in the elites with George Soros being a good excellent example as any. Decriminalize or legalize drugs and three quarters of the police are not needed. Also, consider privatization because cities, towns and states are constantly paying out huge settlements for their bad behavior.
Barry is a tool of the Parasitic Rich. Romney is one of the Parasitic Rich. Which one do you want, the tool or the real enchilada?
Barry is a tool of the Parasitic Rich. Romney is one of the Parasitic Rich. Which one do you want, the tool or the real enchilada?
Fuck you ass wipe. Come try and take 99% of my trading & investment profits (which I assume you define as parasitic AS WOULD BE OWNING GOLD BTW). Ive got a nice extended clip S&W 40 waiting for your commie ass.
The IRS has more guns than you do.
CHS is on to something here, but more government and taxes are not the solution.
The LBO business is fundamentally corrupt. Fiat money makes it so. The screwees are the lenders and employees.
With sound money and appropriately priced capital (eg: savings = investment) then there is no LBO business.
Bain's LBO business added zero value to society. Their growth equity business, on the other hand, did add value. Staples succeeded on its own merits and created value.
Solving the sound money problem will solve the LBO adding no value problem. We need to return to the classical gold standard.
29 trillion dollars - to protect the wealth and influence of a few thousand politically connected? Wow just Wow and the sheeep have no clue about it and continue to demand more Justin Biber and IPads, this society is going to get exactly what it deserves there's no point in even discussing how to prevent a total collapse let's just hope it comes down FastNFurious on the heads of the Prol's and better sooner rather than later
This puddle of drivel should never pass for analysis. According to this, only the ore miner and blacksmith add wealth creating value. That is preposterous.
The only solution is a flat tax with no deductions. But the parasites at the top and bottom would never go for it.
And Tyler - your tacit approval for hating all who are successful in life is getting old. I love your genious analysis but these kinds of screeds are getting tiresome and make me wonder if you truly strive for equal treatment under the law, or simply want to punish.
The problem isn't with wealth it is with the integrity of the system where the corrupt are constantly rewarded based on their power and who they know.
I agree with you but unfortunately it's now hip to hate all successful people - without regard for how they accumulated their wealth. I respect wealthy people who made it sans corruption. Just read through some of these posts and you'll see what I'm saying.
No, in socialism, the state owns the means of production. In the U.S. system, the state owns the means of destruction.
As US citizen says, the power to destroy is the power to control.
And when you run an extortion of the weak and farming of the poor business as US citizens do, you need to control people. Better to run the means of destruction.
STFU
Wouldn't it optimize everyone's standard of living to elevated each to their productive capacity rather than to reward those who are best at stealing and destroying?
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.
__________________________________________
No voluntary payment from whom? Even by stretching this criterion beyond limits, it is hard to find any parasite.
Financial people are often consumers of their own services. They voluntarily pay for it. So it is something benefitial for society.
US citizenism and the need to exclude.
Funny how people who introduce themselves as all encompassing, all inclusive are always determining who is a member of the gang and who is not.
understand money is a monopolised market, monopolies produce garbage
one of the garbage outputs of monopolised money compared to a free (competitive) market is stagnation of change and innovation in money
we are living with the duress, stress, stagnation and ultimately destruction (all monopolies end up eating their own tails) of this monopolised money system ..and we're all hanging on this thread because we have no choice, we are forced to accept the systemic society-wide risk of this monopoly
some US States see these risks and are looking to issue their own currencies ..hopefully in good time
Competition produces monopoly. There were several competiting currencies and as competition progresses by eliminating the concurrence, it gives monopoly.
So what?
Restarting the competitive process between various currencies so it ends the same? Eating up even more resources?
Makes sense. US citizen sense.
Anon - free market competition does not lead to monopoly. This is the biggest myth/lie in economics
it is Govt regulated markets that leads to monopoly (see oil, utlities, healthcare, water, nuclear etc)
where freedom exists there can be no monopoly because the market is open and free (to compete in)
is there any monopoly at car boot sales, farmers markets, street markets or the black market??? No, because any competitor can easily come in and compete anytime
some things like the big capital costs required to start-up say a fish processing factory are known as 'barriers of entry' to a market. So only those with some capital get to compete. But so long as the market is free of Govt regulation, licensing, planning permissions etc it is free for anyone to compete in
Govt (a monopoly itself) is the only killer of the free market and erects the most barriers to entry of our markets against societies benefit
STFU
GFY
there's your autobiography completed
Nothing new here, they've always done this. The difference now is the same thing that happened to the indians and their casinos. More and more families joined the club and as the families got bigger they had to take more and more out as greed took over. Same with the Tribe that is now literally eating us alive. One of those days the folks will be doing an honest days work for a change, making big rocks into little ones. It will improve their health and diet.
Apparently, the progressives have not yet cornered the market on hysteria.
Can we please instead focus on the root causes for the problems we face? Smith's ideas are intended as cures for massive distortions introduced by government over decades, and will simply serve to do further damage. This kind of crap is what stands for policy these days, and it has no party alignment.
Seems everyone has some complicated plan to punish some class of persons and introduce some new layer of regulation or central-planning to right some gigantic wrongs, and no one ever bothers to notice that the solution lies not in the doing, but in the undoing. Or are we all convinced that we can learn nothing from a past in which our ancestors took a raw continent and turned it into the greatest economy the world has ever known?
Systems are always perfectly designed for the results they obtain. Let me say that one more time. Systems are always perfectly designed for the results they obtain. No one here will like to hear it, but our behaviors would not be significantly different, were we to be in the same position as those we love to hate.
Right. Draining the swamp means getting rid of fiat money. A classical gold standard is the solution. All of this other bullshit is just meaningless commentary.
US citizen middle class is something: they have been leeching from the lower class and the upper class since materialization of US citizenism in the US, multiple wars are kept up to keep the US citizen class and its armed branch, the military afloat but no, they are the ones being leeched from.
Deep troubles of self perception.
STFU
To keep up the US citizen middle class.
If the system(taxation) for generating/collecting revenues had ANY relationship to the uhhhh... 'system' used to generate spending, one might actually give a shit.
I think farmers should receive bigger subsidies NOT to produce a crop.
/troll mode off.
I feel much better now that SATAN has stopped trolling
Gordon Gekko "Greed is Good"
http://www.youtube.com/watch?v=Muz1OcEzJOs
michael hudson speaks insightfully about the rentier class and the need for higher capital gains on their income....i favor limited taxes but there is ample justification to tax that income at higher rates...
the real problem may not be the banksters per se although they have in fact established the real problem - namely that the debt based currency is the true leach - another point hudson makes in noting the toxic effect of unrequitted interest payments - perpetual consols which benefit only the very economic elite who have the pricing power to survive in this destructive game of interest bearing money - an abomination of abominations.....one reason why i look forward anxiously to the return of yahushua....
manufacturing is gone from the US, and now we want to get rid of financials in this country? Most small businesses probably cheat on their taxes, I don't think we should send in the IRS to close them all down. I am in no way defending the true parasites out there. But a lot of PE firms actually purchased good company's with mgt hitting their Peter Principal and took them to the next level. sure, those firms that just leveraged acquired companies in order to return their capital provided no value, but i still think most do. Running a company, or anythign really, is not easy. The vast majority are business owners are very ineffecient.
To me, the only necessary regulation is the regulation of size. keep the playing field level, which is the most effecient environment for capitalism. Reducing size also eliminates TBTF. And yes, the gov should fall under size limitatins as well.
Bain Capital's VC fund is the one that promotes growth in well run companies. Bain's PE funds mainly invest in broken companies on the verge of going under and cut costs to turn them around. The examples of levering up to takr a dividend and then putting the company into bankrupcy are rare (I can think of only 2 out of 50+ investments) and I should know Im an investor in 2 of their VC funds and 7 of their PE funds and I worked there for 6 years.
But you douches with no information probably know more then me.
Oh and levering up companies does create value. Go fucking read MM 58. Helps companies capture a tax sheild and deprives Commrade O of money to give to crack feinds. Also leverage and a dividend to pay keeps mgmt on their toes.
This article got me to get off my ass and double up on my donation to Mitt's primary campaign. Kinda nice he wrapped it up early enough he can raise money to attack Commrade O and then go back for another $2,500 fpr the general campaign.
I agree with the vast majority of this column, but I disagree with it loosely painting all banks as parasites. Those banks which serve their original intended function of getting money from those who have it to those who don't thereby enabling them to create the means of actual production by building factories and creating businesses which create productive jobs serve a productive purpose. And VISA provides a service apparently of value to both businesses and their customers, so it deserves what it earns for that service.
Who decides what is parasitic? Mayor Bloomberg? Now imagine his fascist highness deciding who's a parasite versus which soft drinks can be sold.
The real problem here is that the legitimate function of government, that of preventing fraud, has been hijacked by those committing the fraud and thus rendering regulatory response impossible. This means the market cannot clear bad debts since those debts are now being "honored" in perpetuity even when there is no chance in hell of that debt ever being repayed. And until the market clears the bad debt, the market remains broken.
Historically this was often done via violent means but even violence does not eliminate the moneyed class, just the most visible subset of them. The remainder move back in, and for the "good of society" begin proposing more "changes" to financial regulation that ends up placing people back in exactly the same boat within a generation or two. And thus the cycle of stupidity is never ending.
Also for you idiots talking about TBTF banks, show me a single bailout to a single Bain PE fund or to a single Bain investment.
I worked at the HF during 2008. We lost 15%. No bailouts. No gateing of capital. Nothing.
They got bail outs. It's still legal right?
Not productive and not work.
I love it. An article denouncing paper pushers as improductive and a burden on the real economy, and what does ZHedgers say about it? No... Again, they probably think a comrade is behind the keyboard. Keep supporting those very rich taenia saginatas which condemn you to a life of indigent serfdom, ZH, you do your massa a favour.
Taxes should be chopped to nothing.
Tax gas, roads, utilities, municipal, stamp taxes, duties, keep them or add them (libertarian style) cant privatize everything- but kill the IRS and corporate/personal taxes.
How does every other low tax or tax free economy work?
Answer by attracting growth- look at Singapore, imperfect example but at 15% corporate tax this is where the USA should be looking for their growth- the money is flowing outside to the emerging markets by these big multinationals so why "crack down" further? Its obviously not working, GE paid nothing last yr in tax. Billions are sitting offshore by companies.
Vetting small time cheating is probably not cost efficient- like making some dry cleaner pay out yrs of unreported taxes, in turn shutting down the business and laying off XXX employees and pushing up retail vacancy rates and lowering municipal GDP.
Its like the war on drugs, its not winnable so just do the opposite- make them legal. Mexico problem, solved ghetto problem solved, crime problem solved, prison problem solved, excess drug related crime jobs solved. Go into prevention and education- worked for smoking.
Same with corporate and personal taxes, and it would give the ultimate out for a government- "I paid into SS for XX yrs, blah blah and now its gone".
It is going to be gone anyways, and its not their now. Make people accountable for their own finances and future. this alone would revitalize even the stock market with new money that needs are return. Good for bankers even.
OR you could do this:
Do like communist countries used to do, provide corporate housing for employees and provide housing when they are with the company.
OR Turkish style, have R&D and tax free zones for companies to make stuff to export, charge no export duties or corp. taxes and if you build a condo or have a condo inside your tax free zone, guess what? No tax for employees!!! And if you actually do R&D then you get matched 1:1 up to $15m on R&D expenses in the tax free R&D zones.
How well would these 2 small changes work in shitty areas like Newark, Detroit, Vegas, Miami to revitalize neighborhoods?
Plus if you are a J-- banker and want to enslave the world, no better way than an already fenced in area of slaves employees.
Win win for everyone.
(this message was approved by bill sykes. Vote for billsykes in 2012)
>In other words, the connected insider Elite pay nothing at all in taxes
Taxation is theft. It's logically unjustifiable (see Hans-Hermann Hoppe).
> - 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.
What's "beneficial" to society?
In some circles, sticking people in ovens is thought to be beneficial.
Is the service of handing sandwiches out to the homeless beneficial? There's no voluntary payment for it.
Steve Jobs, value creation, seriously? Maybe in the early days...
Bullshit. Communism was imposed on Poland by the invading Red Army. In what bizarro universe is that a vote?
According to Wikipedia, Bain Capital started in 1986 to do venture capital investments. For those of you who don't know anything about venture capital (apparently this includes you, Tyler), VC firms typically invest in high risk/high potential companies. They provide cash which the companies can't get elsewhere, as well as a combination of advice and contacts. Sometimes the value added by VC firms is mainly cash, other times it's the combination of cash and non-cash benefits. For instance, the mere fact that a company has obtained funding from a high-profile VC group can give it credibility in the marketplace and with other investors. All in all, venture capital firms add a lot of value.
One of Bain's first investments was in the company that became Staples. Bain provided extremely early funding to Staples- they funded its first store. Along the way, Bain gave advice and funding, and we all know the rest of the story.
Now it's possible, if not probable, that many of Bain's other investments were more opportunistic, but it's always true that for every transaction you need a buyer and a seller. If Bain didn't provide any value, then how could they have done deals?
You should distinguish between private equity investors and the likes of Corzine. There's a difference between a CDS and Staples.
Most PE funded companies go the restructuring route after they buy it, Bain is like 65% of the companies they have in the portfolio is/are bankrupt or restructuring. Staples was 26 years ago, a lifetime ago and 1 investment. If you have to talk about what you did 26 years ago, chances are you have done nothing good since.
PE is/are financial buyers- they don't buy to build they buy because they can leverage it with debt, make fees, and hopefully sell it for a profit without paying off any of its debt to a new sucker.
This is why PE sucks, they don't know anything about the actual business/industry other than what someone else they pay tells them- this is why they put so much emphasis on financial models and MBAs- because the line they draw is so fine between making it and total bankruptcy.
PE could be good if some things changed, and in some firms they are but too much emphasis is on leverage and short hold periods.
This is way most big PE puts in a debt round themselves, so they can "help" restructure the company and be on the restructuring board when those darned CEO's run it into the ground (which is another lie, the debt is usually too big combined with just normal market flux).
The reason these guys are able to get funded over and over is the banks make the money out of nothing and collect fees which lines the pockets of the revolving door of people at the banks. The reason pensions fund them is because this is the way everyone operates, so they know nothing different and its hard work running an building a company- PE is not used to any real work, just shuffling other peoples money.
There are two branches to PE. One branch is vulture capital that dismembers the carcass, fires workers to tweak the balance sheet and then ladens up the company with debt. Each step is lather, rinse, repeat, such as Bain. The other branch brings new ventures into existance or restores older ventures to profitability. The branch that dismembers companies damages society while the other brings advancement. The side that brings advancement has much higher risk while the vulture side costs all of society... such as Bain.
They stopped doing venture capital about the time Romney took over. he thought it was too risky. They could raise funds from investors, pay off management and keep Bain at arm's length while they borrowed against the company's assets to pay large unearned dividends to themselves while returning money to investors. They risked nothing except reputation if they don't squeeze every last bit of blood from usually a debt free business. Their job was to use debt to monetize the non liquid assets . The debt was virtually never used to invest in the company but only used to pay the large dividends which included the CEO and the board which they usually bought off upfront after DD with bridge loans (if necessary).
The picture perfect example was when Romney virtually broke his cherry on Sealy Mattresses made here in the states. The company had no debt, was profitable but the CEO sold out the company for an upfronter + backender of 55 Million dollars. It was saddled with 1.3B in debt. The only mistake Romney made, which , to his credit - I guess- he didn't repeat, was he left blood in the body which allowed him to sell it to the next greater fools PE company. Now they have learned that it's fine to deposit the remains in Bankruptcy court along with the massively underfunded pension funds which we the tax payers make up.
The difference between Private equity and a Drexal like LBO is PE is CEO and Board friendly. Most of the LBOs were hostile.
Dividend recap
http://www.investopedia.com/terms/d/dividendrecap.asp
Carlyle Div Recap;
http://www.bloomberg.com/news/2012-03-13/carlyle-owners-took-400-million...
If the LBO was hostile, 1 or more things happened:
1. didn't offer enough money to the CEO/board major shareholder(s) to push it through
2. CEO/chair/board is smart enought to see it acutally working out with all the new debt- and then the debt on the debt that they know is coming just prior to them selling the company in 5 yrs or IPOing to get liquid.
3. Rarest- CEO cares about the company, or more commonly just likes golfing 5 hours a day doing fuck all while the company coasts along.
4. Rare- banks say the deal is so overleveraged and even though they want the fees cannot push it past their bosses.
PE mode of operations is buy, fuckup, then sell- this works but only if you have a new crop of small growing companies which needs a growing economy. (like a logger and a forest)
EXACTLY.
And now he is in line to dismember America.
As an ex Ibanker (M&A) my proudest moments were when a client would tell me the work I did was worth far more then my bosses had decided to charge them. When you sell a guys company for $100mm and collect $1.5mm, how is that different then a reale state agent. Except most people can sell their house for the same price via the internet. I would round up 100 potential buyers from around the globe, do all the auditing of private company financials myself, make the marketing book, build and manage the data room and write the contracts. Or how about raising the 1st $10mm round of VC funding for a company now worth $1.5bbn. Or helping a $10bbn company do a consent solicitation on the bonds of a company they were aquioring instead of paying $100mm of makewhole payments? Got paid $10mm for that and for doing all the financial modeling, negotiations and financial due dillegence.
And as a hedgefund manager, did I earn my 2/20 with the following
returns. 2006 +25% 2007 +30% 2008 -15% 2009 +20% 2019 +10%?
Burger King, Sports Authority, Gartner, etc.
- Ned
{Not to mention that the current Bain CEO is a big O $$$$$ guy}
Did you produce anything of value for society?
If most people were financially literate, then the problem would go away on its own.
All of God's creatures have a role to play in the eco system including parasites. "Mom how come Johnny gets a bigger piece of pie than me?" comes to mind. All of those parasites have to hire a useless eater or eaters somewhere in their firm that has to pay Federal taxes eventually. It's trickle down revenue. I don't want to pay taxes when I make it. What the hell am I working for then?
Everything has its proper place. The problem is when parasites take over. That place isn't proper nor healthy.
This makes no sense at all. While Romney may or may not be a vulture capitalist (Soros anyone?), he is a piker in terms of where the real money is. Goldman and the Fed are Keynesian enclaves tied at the hip to the political class. None of them have spent jail time even though they've run multiple Ponzis.
Taking anything from anybody in the form of taxation is not giving the money BACK to anybody; it is theft on the part of the State. This is the same ficticious logic that tells us that the national parks are owned "by the people" (how do I sell my shares?), or that General Motors is now "producing a profit for the taxpayers" (where's my dividend check?).
"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."
best fucking statement ever made by anyone during this crisis.
Taxation of parasites should excede the profits. The trouble is with definitions
useless eaters
Yeah, but they are Job Creators. Therefore they shouldn't have to pay any taxes.
Bunch of crybabies in this thread. No business should have to pay taxes.
If we look in net terms, they're probably mostly job destroyers rather than creators.
"No business should have to pay tax"
Usually they just go after the small ones because they don't have the resources to hide money, buy targeted tax breaks and other Tax payer subsidies like the "Royalty Relief Tax" on oil companies who drill on tax payer owned lands. Yet the oil companies do pay royalties or mineral rights royalties to private land owners. Witness N. Dakota, where a small town that was dying in the 90s and one guy came out to all the towns folk about the mineral rights from them for a few hundred bucks a house and now draws $80G a month from the oil companies that are fracking. I'm sure he's the toast of the town as he has hasn't used a dime to invest in anything that would help the town and that would make him money like building small apartment complexes and renting them out. people who wants jobs there have to BYOH.
As long as you don't mind paying for that Bullshit, sure, why not, we are going over the cliff anyway, but lets make sure no small business from a one man sole proprietorship to a multinational, doesn't have to pay taxes and that all businesses can fail.
This entire post is patent nonsense.
Mr. Smith's solution to parasitic business practices is to insist on a bigger piece of the action. Wallet envy pure and simple.
Better to put an end to the people and practices which are the source of our problems. It should be physically dangerous to be a parasite. Personally I'm liking that guillotine idea offered above.
Then go to work on a flat tax on every dollar of income from every source of income over say $20,000. Benefits by the way is income.
A grand idea.
Let's create a new executive branch dept. with hundreds of thousands of unaccountable bureaucrats to do the 'productive' work of determining who is productive and who is a parasite.
I can only see a positive side to this proposal.
Parasites taxed at 110%.
I love problem solving...It makes me feel productive.*
*Tax exempt, natch.
ooops,
Too stupid for a double post.
If giving the rich tax cuts will help save us all, why not do one better? Why not give the rich YOUR OWN money as well. Just clean out your accounts, write a check and send it to the richest person you can find. It'll really bring our economy around in weeks!
You see, the rich care about you, they worry about you and will look after your own best interests. Now just believe in the rich and everything will be ok.
Also, the rich create jobs. The past 3 tax cuts for the rich created millions of jobs...wait...that didn't happen did it?
And another thing, the rich need to be free to put their money wherever they wish. No Iron Curtain should prevent the rich from sending their money to the Cayman Islands, Turks and Caicos or say Mauritius Island.
And lastly, why do you bother the rich who are "successful" at ripping everyone off? Why ask them to pay the rent that is needed to run a country? These rich have "arrived" and are better than you, are more nobler than you and deserve to pay not one red cent because they're rich.
You lowly serfs just don't know your place anymore...
So we should do what?
Go and take from the rich? Take all their money?
Do you have any idea what it's like to own a business, start a business, pay business and personal taxes, be screwed my our tax system and pay accountants to figure it all out? No, if you did, you'd realize why they park money overseas where it's simple and they can keep their money instead of giving it to leeches like you who complain and don't create.
Do you have any clue what it's like to work for yourself, 90 hours a week, and then have someone like you show up in 10 years and say, 'you are evil because I decided to read conspiracies and paint paintings while you worked and got rich. give me your money.'
My good friend is a millionaire - he's work his fingers to the bone everyday with a landscaping business, 20 years, to make his millions and begin to live off his money while he enjoys life and gives other people jobs.
Or maybe we should be like my other friend - who couldn't go to work on time and lost his job three years ago, lives with his mom, has a side business 'making movies', lives off the tax payer, and listens to Alex Jones and complains about the Fed all day.
You reek of jealousy and unemployment benefits. The stench of conspiracy in place of hard work is coming through my speakers from your posting.
Stop being jealous and go make a fortune.
I wish Atlas would shrug already...
Atlas shrugs
Stop Paying Your Taxes ..much more effective