The Poverty of Nations
There is plenty of wealth to go around in the world, but its tied up in too few hands for democratic capitalism to operate efficiently for society at large. Thus, in order to maintain civil order, totalitarianism increasingly becomes a byproduct of this conundrum.
According to Forbes 2011 survey of billionaires, they hit all-time new records for total wealth and numbers (the total count of billionaires is 1,210), thanks to reverse Robin Hood taxation policies that impoverish government coffers, i.e., Federal Tax Receipts, whilst transferring those dollars, via a doctored tax code, into the pockets of tens of thousands of millionaires and billionaires. The total count of what Forbes refers to as High Net Worth Individuals is 871,000 people worldwide worth over $30 million each, implying total wealth of $26-to>$50 trillion; $26 trillion is nearly twice the size of the U.S. economy.
Wealth creation has increasingly become the key measurement of capitalisms efficacy ever since Adam Smiths magnum opus An Inquiry into the Nature and Causes of the Wealth of Nations (1776) aka: The Wealth of Nations, wherein he expounds upon how rational self-interest and competition lead to economic prosperity for society at large, American industry and government have been guided by these free-market principles. For over 200 years, with bumps & lumps along the way, prosperity reigned, and Adam Smith would be smiling. But, for reasons he describes within his own treatise, Adam Smith would be frowning today because of the sorry state of capitalistic nation-states.
Again and again, Smith warned the general public that a true laissez-faire economy could become a conspiracy of business and industry scheming to influence politics and legislation against the best interests of the consuming public.
complete piece: http://www.ukprogressive.co.uk/the-poverty-of-nations/article18920.html
The rich in this and other countries will never give up their money. I like the new French presidents idea of taxing 75% after your first 1.3 million francs, however we have to wait for the legislative elections to happen to know if he has a chance on that.
We might have to all go outside and sit down in the street at the same time or something. Or all take a week off work.
That's on top of voting, if that doesn't work.
But if enough people want to change the system, it will change. Well actually it already is changing, it's getting worse and more repressive. So I guess we had better hurry up.
And yes I hope that thing in France passes.
The tax code has redistributed income and wealth to the top for over 20 years at the expense of the middle class and the economy as a whole. This was made worse by 12,000,000 unemployed, cheep labor as women entered the workforce and fewer consumers as a result of and 50,000,000 abortions (- factors generally avoided by politically correct economists). The economy is no longer resilient. Tax expenditures and government subsidies have enabled businesses to show profits as the national debt grows. Neither Mr. Obama's Buffet Tax nor Mr. Romney's 20% across the board cut in income taxes will heal the middle class.
Please consider the 2-4-8 Tax Blend a comprehensive tax reform for both individuals and business that can be defined in one sentence:
Tax individual and corporate income at a flat 8% rate (with no deductions, credits or loopholes), tax individual net wealth at 2% (excluding $15,000 cash and retirement funds) and impose a 4% Value Added Sales Tax (VAT) on business.
For business the combined 8% income rates and 4% VAT would be the lowest and most competitive business taxes of all the developed countries. [The U.S. is the only developed country without a VAT]. The 8% income tax rate also resolves the significant problem in the deferral of taxes on foreign profits caused by imposing a 35% tax (less credit for foreign taxes paid) when the money is brought back into the U.S.
For investors, the net wealth tax might seem revolutionary by U.S. standards, but most high earners would willingly pay a 2% net wealth tax in exchange for eliminating the capital gains and estate taxes and keeping 92% of taxable earnings. The ability to buy and sell assets without being taxed on the gains would spur a new era of investment freedom. The increased after tax income would also create wealth much faster than a 2% net wealth tax could diminish it.
For workers, the elimination of the payroll tax and reduction of the income tax rate creates an immediate boost in take home pay. For example, a young family earning $70,000 currently pays combined federal taxes of 19% but would take home $7,700 more with an 8% income tax (assuming net wealth of under $30,000). This additional $641 per month represents an enormous opportunity for both savings and consumption. The $15,000 per person cash wealth tax exemption also encourages a responsible level of liquidity. The retention of tax exempt retirement savings programs recognizes the need for the elderly to have sufficient assets to supplement social security. Current interest tax deductions for mortgages and student loans are replaced by the ability to deduct the loan principal in computing net wealth. This is the equivalent of a 2% reduction in the interest rate and is arguably a better incentive for both home ownership and higher education.
Eugene Patrick Devany, JD, MPA