November 26, 2019
We read a fantastic article from American Consequences feature contributor Dan Ferris over the weekend and had to share…
What the Next 10 Years Will Bring
By Dan Ferris
We’re all the government’s milk cows. That’s just life in one of the richest developed nations that has ever existed. There’s not much you can do except eat, sleep, pay taxes, and otherwise avail yourself of the ample opportunities such a country offers.
But that’s not all… Democratic presidential candidate Elizabeth Warren thinks we need to start cutting our country’s richest citizens up like beef cows.
We’re supposed to believe life will be wonderful if only Warren – or whichever politicians rise to power – can steal enough money from the billionaires under the premise that they’ll use it to cure all of society’s ills.
As a recent Wall Street Journal article noted, in some cases, Warren’s proposed tax policies would have some folks paying more than 100% in taxes on certain investments.
Yes, you read that right. The Wall Street Journal provided an example…
Consider a billionaire with a $1,000 investment who earns a 6% return, or $60, received as a capital gain, dividend, or interest. If all of Ms. Warren’s taxes are implemented, he could owe 58.2% of that, or $35 in federal tax. Plus, his entire investment would incur a 6% wealth tax, i.e., at least $60. The result: taxes as high as $95 on income of $60 for a combined tax rate of 158%.
That’s hypothetical, of course. Tax treatments are complex and vary widely. But does anyone doubt how easy and safe it is to cast billionaires as villains today?
Warren is certainly smart enough to know you can’t accurately paint an entire class of people with the same moral brush based on an arbitrary net worth threshold. She’s doing it on purpose.
Smart or not, when the game is virtue signaling, Warren smiles and says, ‘Hold my beer’…
You can buy a “Billionaire Tears” coffee mug on her website for $25. And as financial news service MarketWatch noted last weekend, people familiar with her campaign said it’s one of the hottest-selling items on her website.
Not a great way to signal you’re capable of rational thought about the tax code.
Yes, the tax code needs fixing… But starting the debate like this makes it worse, not better. I bet Warren is smart enough to know that, too (and corrupt enough not to care).
Warren plans to steal from the rich and give to the unrich by providing more health care, childcare, housing, and education for all Americans. Nobody could possibly be against those wonderful things… could they?
If you don’t think our country’s billionaires should pay more taxes to help poor people, maybe we should lock you up until you’re a better person. You know… like Elizabeth Warren.
Don’t waste your time writing in to tell me it’s not stealing…
Of course we should all pitch in to build and protect a decent way of life. I’ve never said otherwise. But this isn’t about taxing fairly…
It’s about using mean-spirited rhetoric to get elected. Warren is manufacturing a villain, same as Trump, Obama, Bush, Clinton… and all the rest of them have done in the past.
If you think this is about “soaking the rich” or fixing the tax code, you’re just falling for the sales pitch. If Warren gets elected and passes her Draconian measures, how long will it be before mere centimillionaires are the new targets?
A wealth tax will reduce the number of billionaires. Warren will need to find new beef cows once she gobbles up the current herd.
Then, how long until she targets the millionaires… or even $100,000-aires… or anyone with a 401(k)? You don’t think it could happen? You’re not paying attention, Skeezix.
Federal tax rates were 0% on all incomes – whether you made $1 billion or minimum wage – until the 16th Amendment made income taxes a permanent fixture in 1913. At the time, the minimum taxable income was $20,000… or about $609,000 in current dollars.
In today’s dollars, the lowest taxable income has evolved substantially over the past century… It has shifted from a 1% tax on incomes $609,000 and up in 1913 to a 12% tax on incomes $9,700 and up (for an individual) today.
It’s not about fairness. It’s about politicians getting their foot in the door so they can steal as much money as possible from as many people as possible, rich and poor alike.
Politicians always do this…
They sell you a scheme, claiming it will only affect a small group of people who can easily afford it – like Warren is doing with the roughly 600 billionaires in our country right now.
Then it creeps and creeps over many years… Then, all of a sudden, the government is openly ripping off people who can’t afford it and attempting to say it’s the fault of “rich people” who don’t pay enough… under the tax code the government itself created!
Just like Warren’s appeal today, the original income tax was a “soak the rich” scheme. The mood of the day was “big government good, rich people bad.” As historian Paul Johnson wrote in his excellent 1997 book, A History of the American People…
Gradually, the progressive intelligentsia, and the bulk of the Democratic Party, began to see a strong federal government, with wide powers of intervention, as the defender of the ordinary man and woman against the excesses of corporate power.
The notion of the Public Sector (good; needs to be expanded) as opposed to the Private Sector (potentially bad; needs to be invigilated and regulated) began to take possession of the minds of the do-gooders.
For this purpose, it was necessary for the state to expand its revenues. Therefore a personal income tax, especially if it possessed progressive characteristics, and therefore was income-redistributive as well as revenue-raising, was a desirable institution…
The state, not only in the United States but in many other countries, was seen as a knight in shining armor, coming to the rescue of the poor and the weak and the victimized, and doing with objective benevolence what otherwise would be done selfishly by greedy aggregations of private wealth.
(How poetic that these medieval knights were little more than indentured Mafia hitmen, not defenders of the downtrodden.)
The first permanent income tax in the U.S. was justified by the spreading belief that people with money were evil and greedy… people without it were deserving of more… and that the federal government had to intervene to restore the balance.
Any student of human nature – as all good investors are – should have known what would happen… They should have known income tax rates wouldn’t do anything but rise. And the lowest taxable incomes wouldn’t do anything but fall.
And again, that’s exactly what happened… and what will always happen.
No matter how you measure it, the program to “soak the rich” became a program to “soak every soakable pile of loose change in the republic, rich and poor alike.”
Warren wants power, not a better United States – and certainly not a fair tax code…
If she wins the presidential election a year from now, she will abuse a wealth tax. And subsequent administrations are guaranteed to do even worse… It’s human nature. This type of thing is why Europe is a big, fat, sclerotic, slow-growth, overregulated, and overtaxed mess.
Elizabeth Warren won’t do the tiniest bit of good with the money her policies are designed to steal from the country’s billionaires.
She’ll use the presidency for personal gain… and then leave us all saddled with measures that have never worked anywhere in the world, nor at any time in history.
She shouldn’t be president of the U.S. any more than a 17-year-old should be handed a bottle of whiskey and the keys to a Ferrari and told to go out and have a good time.
It doesn’t matter who gets elected in 2020. I guarantee you the next administration will do what they all do… make government bigger, and infringe upon your person and property just a little bit – or maybe even a lot! – more.
Don’t sit by waiting and hoping for good changes to happen. Instead, prepare yourself for what is far more likely… more economic destruction by the political class.
To help you prepare for what’s next, my colleagues at financial publisher Stansberry Research have published the second edition of The Battle for America. It’ll show you how to survive – and even thrive – in the aftermath of the next election. If you haven’t read it yet, click here to find out how you can get a copy today.
No, I’m not a Republican. Far from it. Left, right, and center mean nothing to me… They’re all part of the same hypocrisy.
When I hear someone call themselves a liberal (Democrat) or a conservative (Republican) out loud, with a straight face, it reminds me of the classic Dr. Seuss story, The Sneetches.
If you’re not familiar with the story, one group of Sneetches believes it’s superior to the other because its members have green stars on their bellies, while the others don’t.
Then, a fellow shows up with a machine that puts stars on… And he charges a few bucks a pop to turn the starless Sneetches into star-bellied Sneetches. But then, having a star loses its appeal… And the entrepreneur sells them a trip through another machine to remove it.
Back and forth the Sneetches go… until they’re all broke.
Now here are some of the stories we’re reading…
Even though we’ve seen such incredible growth in the crypto space over the past several years, we’ve only laid the groundwork for what’s to come… 2020 could make the past decade of blockchain development look like child’s play.
“We will continue our tradition of not investigating Mike (and his family and his foundation) and we will extend the same policy to his rivals in the Democratic primaries.”
Walt took several days just to get the neighborhood’s approval of the name he had chosen for the infant boy. “Skeezix” was Walt’s first choice, a slang term of endearment for a small child…
And let us know what you’re reading at [email protected].
Publisher, American Consequences
With P.J. O’Rourke and the Editorial Staff
November 26, 2019