Thursday, January 13, 2011

The Worst Tax of All

Everybody likes to complain about taxes. America was founded on tax complaints -- “No taxation without representation”. The Republican Party has turned it into an art form. It is the central pillar of their platform. Americans are taxed too much and it only goes to a wasteful government anyway. Free enterprise -- “The Market” -- can do anything better than the government can. Except defense. If only it were all true.

I’ve already showed you that America has some of the lowest taxes in the world. But I left one tax out of the equation. I don’t know why. It should have been obvious. After all it is worst -- the highest -- tax of all. This tax is truly outrageous. It is four times higher than all Federal taxes combined.

Read it and weep.

During FY 2009, the federal government collected approximately $2.1 trillion in tax revenue.

That’s a lot of money the Federal government has taken out of our pockets. Hard-earned money for most Americans. Does it make you angry? Then you ought to be downright livid about this “tax”.

The Greatest Tax of All

”Total home equity in the United States, which was valued at $13 trillion at its peak in 2006, had dropped to $8.8 trillion by mid-2008 and was still falling in late 2008. Total retirement assets, Americans' second-largest household asset, dropped by 22 percent, from $10.3 trillion in 2006 to $8 trillion in mid-2008. During the same period, savings and investment assets (apart from retirement savings) lost $1.2 trillion and pension assets lost $1.3 trillion. Taken together, these losses total a staggering $8.3 trillion.”

Okay, I was off by $0.1 trillion. What’s $100 billion among countrymen? ($333.33 per American but who’s counting?) The entire Federal tax bill added up to $2.1 trillion for a year but the banksters “taxed” you $8.3 trillion. So it was over a period of two years. They still aren’t done and, besides, you get the point. What’s really sad is that they were supposed to be earning money for you -- for your retirement plan or college fund -- not losing it. Certainly not stealing it.

What’s that? You feel cheated by my literary trick? How about their financial trick? That cost us $8.3 trillion (and I bet it was more than that.) If you want to feel cheated, feel cheated about that. Speaking of which, where’s The Law? Anybody seen the sheriff? Where’s a cop when you need one?

Oh, that’s right. The banksters told us we didn’t need one. “Who us? We don’t need no stinking regulators. Trust us. “The Market” will regulate itself.”

Greenspan Concedes Error on Regulation

”“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform.”

Don’t you dare let anyone say nobody saw this coming.

”As far back as 1994, Mr. Greenspan staunchly and successfully opposed tougher regulation on derivatives.”

The people that wanted to regulate them saw the danger.

Hopefully, some talented writer will find some way to make this idea “sing”. Somebody will find a way to translate it to where the masses understand and are motivated. Because the only thing I can think to call it is a Stupidity Tax. Our stupidity. An $8.3 trillion dollar tax on our greed and stupidity. And that is certainly no way to “sell it”.

We’ve been penny wise and pound foolish. We let private forces dismantle a regulatory structure that had protected us well since the Great Depression -- the last time we learned that it was costly to get greedy and stupid.

The truth is, we could have afforded the taxes that paid the regulators. We could have paid decent salaries to our Congressional Representatives instead beggaring them into near homelessness -- or graft. It would have been cheap to pay top-notch people a good salary to look after our interests. Compared with being foolish.

Instead, we chose to believe the Hucksters. The Enchantress. The Jester seems wise because we’ve been listening to a Fool. We’ve been stupid. The truth hurts.

Don Brown
January 13, 2011


Stephan Ahonen said...

I've been thinking a lot lately about our political an economic systems and it occurred to me... It's a widely recognized axiom that anyone who seeks power should be immediately disqualified from attaining it. The political system of the United States (and many other places) is largely built upon a principle of checks and balances to make sure that no person or group can ever wield too much power.

The slap on the forehead comes when you realize that political power is not the only type of power, and that unchecked economic power can be just as disastrous.

The stability of our society and civilization depends on whether we take steps to limit the effectiveness of economic power, or whether we "just let the free market sort it out."

The problem is that wealth crosses national borders very efficiently.

John said...

Good stuff, Don. I think you missed a trillion towards the end -- in the "Hopefully, some talented..." paragraph, shouldn't it be 8.3 trillion?

Don Brown said...

You're right, John. Thanks for the catch.

Don Brown

Don Brown said...

Fixed. Thanks again, John

Don Brown

Kevin said...

But there is a writer out there who has done an excellent job of piecing this all together. He's Matt Taibbi, a writer for Rolling Stone. His book Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America breaks all of this down into very understandable segments. He saves some of his harshest criticism for Alan Greenspan.

He dispels the myth that the financial crisis was brought on by the mortgage industry where unqualified people were put into homes they couldn't afford. While this certainly happened to many it is a minuscule part of a much larger problem; that being the derivatives market and a total lack of regulation on Wall Street which Alan Greenspan helped to promote.

Add it to your Kindle or bookshelf. You'll be glad you did.

Kevin said...

I just wanted to clarify one thing in my previous comment. I didn't want to leave the impression that the mortgage industry was not at fault in what led up to the near collapse of our economy. They were. Many of us, myself included, were left with the impression that so much of what led to the collapse of the housing market had to do with people qualifying and buying more home than they could afford. While that certainly happened it is but a very small part of the overall.