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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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If the "rich" could do it on their own instead of lobbying gov't for favors. I can remember the credit card industry trying to lobby Congress to FEE people who didn't carry a balance on their cards. It's nice voting yourselves money.
I swear, you pull all the gov't help business gets...they'd fall flat on their faces.
These goddamn pirates are empowered, largely, by the fact that we cooperate with their system. Imagine of just ten percent of the people in California (where I live) just flat out refused to renew their auto registrations. What would be the fiscal damage of that little act? We voluntarily pay into this wage taxation scheme through accepting the terms of the IRS Collection Syndicate W4, and no one will hire you if you don't comply with the Borg.
I'd really love to unfuck myself from my social security number, ditch the goddamn driver's license and auto registration, wipe my ass with my checking account (which I use very rarely) yet still be able to function the way I do in society. That's obviously a pipe dream since the system is such a multi-headed venemous snake, but one huge act of resistance, one giant act of refusal to play along with the looting scheme would go a long way and wake motherfuckers up.
Also, I like titties.
A lot.
This guy usually has much bettery commentary. This article is retarded.
I have an idea - why don't we have a government that only spends what it takes in and leave everyone alone.
The fact this article even gets attention on this site worries me, as it starts shifting to who can be rich, and what the definition is, and what should be confiscated from them, etc. Determined by whom? By this douche who wrote it. I read the writer's history and he's basically that - a writer. That's it - not a job creator, he's not putting money into the system for capital, he's not doing anything productive other than feeding off dollars made by people employed by people like Romney.
He's writing a blog and begging for donations because his acting career and writing career suffers.
Meanwhile, I'm supposed to work my ass off every day to get rich to have this moron tell me if I'm a parasite?
Thinking Mitt Romney is a parasite is ridiculous. Here is someone who helped create jobs by restructing companies that were failing, or killing off companies that couldn't make it and then reallocating those resources to companies that could - yet he's a parasite. Even now he's creating jobs related to his campaign by taking donations and then reallocating them to employing people.
You think that's not work? You think he didn't spend every moment at the firm? You think he didn't spend holidays and birthdays away, didn't lose in deals and cost the company money and be worried? You think he didn't suffer while working his ass off? You think you become the head of Bain and not work your ass off 80 hours a week and stress? You think you run the Olympics and cruise on through at 15 hours a week?
Of course not - but most of you fix brakes at TiresPlus and get on this site and complain about people who own TiresPlus. I'd wager most of you haven't the slightest idea what it's like to work like Mitt Romney has.
This labeling of parasitic rich versus real rich versus middle class is just wordsmithing. I can see the propaganda from the left coming out now - all about how being rich is good, if you are the good kind of rich. But, if you work your ass off, accumulate wealth, and then park it somewhere you are evil while you live your life, buy houses, and give people jobs. The true parasite is the government which needs term limits, a balanced budget amendment, and limited tax collection that will force it to dedicate taxes to programs which are vital.
Do I like the banksters? No. Do I like the Fed? No. Do I like our out of control spending? No. There are remedies for that if people would stop being scared of the the NWO Fed boogie men, get in the street, and force the issue in the voting box.
You're too dumbed down to do that - it would require you taking your left hands on your dicks and your right hands off your mouse long enough to work at something other than getting junked.
I'm weary of some guy who wrotes a blog and wants me to think he's somehow a productive member of society on par with me when I work my ass off 50 hours a week and own two small businesses that take up another 35 - 40.
Screw this - Tyler, try finding someone who doesn't masterbate to pictures of Marx while telling us the picture of is Santa Claus.
Ridiculous.
Wealthy parasite or poor one, something sucking the life blood from you is still a parasite.
Calling a spade a spade is generally considered insensitive and politically incorrect.
The current regime has effected a byzantine system of gerrymandered regulations which create perverse incentives. Consequently, too often, wealth is accumulated not by providing a public good, but by raping the commons, or embezzling the successor generation. In a libertopia, property rights would be enforced to defend against those depredations, but here and now courts are corrupt and inaccessible. And the unborn are unlikely to rise up in arms.
There is a real distinction to be made between different acts which have different consequences, and if that's "wordsmithing" I'm all for it. Ideological blinders are crippling things.
I do not get angry at a leech who sucks my blood in the forest.
I make sure I wear clothing that prevents him from doing so, and if he does land on me, I pull him off slowly, carefully, and recognize the connection between us.
I don't get angry at a snake who bites me - I try to make sure he doesn't, but know it's his nature and wear snake proof pants in the woods.
Your problem is not with the leech, it is with the lack of clothes. Human nature is human nature and laws are designed to prevent the excesses of human nature, or to make the rare instances punishable to a point that others would not do so out of fear of the consequences. If the laws were changed to prevent these parasites from being able to do their neferious deeds, we would be complaining about other issues.
You nailed it on the head, the regime.
Your morals are not the morals of someone who is a leech. They see nothing wrong with what they are doing, nor does the law, or those enforcing the law atleast.
Laws are supposed to be for the common good, not corporations. Laws are supposed to protect us and maintain the common good, not Baine Capital.
You'll never stop the leech or a snake - you know it for what it is and you protect yourself from it.
I'm curious - how many of you work for companies owned by the poor?
Increasingly, a very large proportion of non-governmental workers in the U.S. work for public companies, which are largely owned by pension funds and insurance companies, the beneficiaries of which are overwhelmingly, if not poor, then in constant danger of being made poor by the wealthy managers of those funds and companies.
So, no middleman ever makes an honest living? That's a pretty pure form of Marxism. It's also been at the heart of a lot of ethnic strife. It's a really ugly idea.
Now there are certainly thieves out there for whom this is true, such as Bernie Madoff, and we do have a current problem with control fraud where shareholders get shafted, but it's not a class thing.
Well, except for our native criminal class, the politicians who can't seem to find a crime in any of this mess.
How is that not a class thing?
I
What a stupid article - there is no bigger parasitic financial elite than the Federal Government and Congress.
"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." - is this not true for the Federal Government, Congress, and the IRS (oh, I forgot, taxation is voluntary!)
Where do the corrupt Congress get most of their campaign contibutions? Elite financial parasites?
Here's a short list of "parasitic" elites:
- bankers (it goes without saying that those who "engineer" money and finance via fractional banking, funny accounting and gambling with money that is not theirs to play with on derivatives, etc.)
- any owners and board of directors (shareholders already lose their invested shares and get front-runned by insider trading; and workers already lose their jobs) who "made their wealth" via government created and protected laws of "limited liability" (government, corporation, union, non-profit organizations, etc.)
Side note:
Unions are allowed by our legal/justice system to collectively bargain as "juristic persons" just as our Supreme Court has ruled that corporations may also be ruled as legal persons. I fully disagree with the concept that collectives (groups of individuals who cannot possibly group-think) be treated as individuals. But since unions are allowed to collectively bargain as an individual, in this case at least the court is being consistent by including the corporations. This is the inconsistency of some OWS folks. If you are for unions then you must also be for corporations.
http://en.wikipedia.org/wiki/Juristic_person
Just as governments are monopolies on force, unions are monopolies on bargaining power and corporations are monopolies against competition from small businesses and new-entries (entrepreneurs). They all protect their own collectivist organizations' interests and really their own power structure and are all against competition.
Unions are people too? How come the Occupiers never got THAT memo?
- Ned
Silly article, although it's always good to raise the issues. All we need is NORMAL tax rates--that actually stick. Clean up the horrible tax code language, stop with the shielding of pretend investment and offshoring, sure. But there's no real need (and not a lot of fiscal benefit) from jacking top rates much above where they are. One can make a fairness argument to go up from the mid-30s to somewhat higher, if only to pay a tiny part of the debt our babies have been crippled with due to the super-rich and their psychocorruption games. But the more important thing is to stop shielding the rich from bankruptcy due to their stupidity, and to remove the truly heinous incentives for malinvestment--tax shields and most importantly interest rate shenanigans from the Fed. That's how we got into this mess, and sure maybe some revolutionary redistribution might actually be healthy as a counter-weight to the amassed state socialist gains of the super-rich (retroactive war profiteering tax, anyone?)...but overall tax policy should just be NORMAL and it's just as stupid for the right to pretend they don't live in a society as it is for the left to pretend that a strawman stuffed with ill-gotten cash can simply be mugged to bring on Utopia.
Really, kids, try a bit of common sense. Yes, yes, shrink the government by 20-30%, roll it back to 1980 or whatever. Pip pip. You'll still need revenue. The basic problems aren't that hard if we break the core corruption. Which, for a good argument, I still think the unions/Hollywood/trial lawyers (fake left) are like one-twentieth as much of the problem as the superrich and the corporations (fake right). But it doesn't matter--the same reforms would affect both.
How can you expect social responsibility from an Objectivist?
Are there any beneficial parasites in Nature?
The City does not pay one counterfeit penny in taxes, although they manage and leech tax money off everyone else on earth. Furthermore the gaudy Rothshcild mansion Watterston Manor (sp?) outside London has some kind of public tax-exemtion status so they don't even have to pay taxes on that big tacky shack. They run the tax scam because there is no other way for them to make money.