By: Tom Chatham – Author of Rebuilding The Republic
Every liberal I see on TV keeps yelling tax the rich more. I don’t think they really understand how that will work so lets look at it. Most rich people get a majority of their income through capital gains so raising the income tax rate will do little. For someone that is mega rich , they don’t need to make any money during the year. They already have enough to live on the rest of their lives, several times over. That being the case, they have no need to make any money from capital gains either.
The rich are currently selling off their paper assets and putting this money into hard assets to preserve it for later. If you have a vault full of gold, you won’t pay any taxes on the gains until you sell it so it can go up in price multiple times without the owner having to pay any annual taxes on it. They can sell off small amounts as they need it and pay only minor taxes every year.
George Lucas recently sold the Star Wars franchise to Disney for mega millions. He sold it now so he could save many millions of dollars in taxes that will take effect next year. Sotheby’s has been selling record amounts of art, jewelry and other tangibles as the owners take advantage of this last opportunity to save on higher taxes. The buyers are buying to lock in their asset values for future use. This is exactly what I mentioned in The American Dream Lost. Between the new taxes and monetary devaluation, the rich will increasingly convert their wealth into hard assets to preserve it. Those that stay in paper assets will have it taxed and devalued away until nothing remains.
This wealth preservation is lost on those who think taxing more will get the money from the rich. When the tax revenues fall, as they always do when something like this is done, the government will have to do something else to appease their base. The only way to get money from someone that has plenty and pays no taxes is to create a new tax. The only tax that accomplishes this is a wealth tax. If you tax someone on their net worth, it makes no difference when or how they got it. This is a tax that would seriously hurt the super rich and is why I think they would not allow it. All of those good liberal millionaires and billionaires that talk of not being taxed enough would change their tune very fast if this type of tax were proposed.
If the rich do not pay then someone must. Even if they did pay, it would not be enough to keep up with government spending. The advent of new taxes such as the VAT or Carbon tax would hit everyone at every level and those in power would see this as preferable to giving up their wealth for redistribution. Keep in mind that half of the elected officials in D.C. are millionaires or multi millionaires.
These taxes are only the beginning. You can also expect them to come after your savings and retirement plans as well. As the government coffers empty they will need more fixes to keep the mill running. The current government will begin to resemble something like the Ottoman Empire where such things as each tree was taxed so most were cut down by the owners to avoid the tax. This type of environment is what causes the massive wealth destruction that impoverishes nations as people destroy assets and capital to avoid the horrendous taxes they cannot afford.
In the end the government will own everything that has not been destroyed. This is the creation of the socialist state where the people rely on government for everyday needs. This is a process that can take years or even decades to complete. It can be done so slowly that most cannot identify the reasons they are becoming impoverished. The ones who fail to see the reasons are the same ones who ignore the warnings of others who see clearly and avoid the losses.
Many now see the writing on the wall and some have even petitioned the White House for session. Many liberals have launched counter petitions to have the secessionists stripped of their citizenship and be deported. I find humor in this train of thought. If you secede you revoke your citizenship and self deport, and you do so while taking the land with you.
The coming years will be difficult and nothing like anyone could ever imagine. As the government becomes more desperate it will take measures that seem illogical and unproductive but it will do so as a means of self preservation. If the people sit idly by and allow the destruction of their economy and private property and do nothing, they deserve what they end up with. That may be nothing more than a hole in the ground, which they will be taxed on.
By: Tom Chatham – Author of The American Dream Lost
Any good farmer knows that a milk cow can be a very profitable addition to a farm. The milk cow, over the course of years, can produce many times its present value in milk products. It is therefore to the farmers advantage to care for the cow to get the most benefit from its production. A good farmer knows that if a milk cow is not pushed for maximum production, it can produce good yields for as many as 10 years and provide good annual income for the farmer with only a few cows. Many farmers who maintain large herds find it is most profitable when they press their cattle for maximum production. This burns out the cows production abilities in a few years but the farmer gains from this increased production and decreased feeding expenses.
This should be a good lesson in economics for Americans. The American taxpayer milk cow has been maintained since 1913 as a good source of income for the government. Each generation of taxpayer has increased the size of the herd making more profits for the corporation. The government helped insure the cows had good pasture and plenty of water to feed on which limited the governments income but made for happy complacent cows. Now that the herd is larger and the governments appetite for large, quick profits is increasing, they need to push for maximum production, or tax money, from the herd. The needs of the government has now surpassed the need for happy, complacent cows and production must be increased to extract the needed funds.
Pastures of clover are now giving way to feedlots full of cheap grain. The taxpayer is being pressed for maximum production and a few wealthy cows are keeping up production for the rest of the herd which is slowly decreasing production. If these wealthy cows were to suddenly leave the feedlot, never to return, for the pastures of clover they want, production would fall and these milk cows would suddenly become more profitable as beef cows to be sold for slaughter.
The wealthy in America, whether you like them or not, pay most of the taxes in this country. When the conditions become such that they refuse to participate in it anymore, they will leave for greener pastures taking their money with them. This will leave a struggling middle class to make up the difference which they cannot possibly do. At some point the government will decide its more profitable to strip them of everything they have left and send them to the poorhouse for the last bit of income they can get. We may be seeing the beginnings of this type of liquidation now. The cost of feed is going up and the income produced is going down so cheaper living quarters may be in the cards for this herd before the final liquidation of all assets.
The taxpayer is important to the government only to the extent that they can provide money for the government largesse. When this is no longer possible the government has no more use for the taxpayer and will stop trying to milk them and just turn them into hamburger. For those that cannot grasp this fact, a study of farming techniques and practices may help to enlighten you to the reality of how the world really works.