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Here’s You and Here’s the Top Ten Percent

Family Net Worth graph of change from 2007 to 2017

In a nutshell, here is a graph that summarizes everything you need to know about the unsustainable US economy. Unless you’re in the top ten percent of income producers in the nation — or, at least, living in their neighborhood — you are living in a dingy bedroom economy that has only seen its net worth decline since the Great Recession began. Those who are in the top ten percent, on the other hand, profited astronomically from the Great Recession. It’s the best thing that ever happened to them, and you helped them do it with tax-backed or even tax-funded bailouts and by allowing them a perpetual cycle of savings on their capital gains.

Clearly the only ones who “recovered” are at the top

 

Insanity is repeating the same thing over and over and expecting different results

 

Now you can see how those bailouts have trickled down to you as well as how capital-gains tax breaks have trickled down. Are you now going to go for Trump’s third-and-greatest-ever round of trickle-down economics?

Lower taxes for corporations may be a good idea (why tax the economic engines and rob them of fuel) if they also come with the end of loopholes (corporate welfare) and with a provision that the corporation cannot be engaged in any corporate buybacks during that tax year or the following. (Without that provision, lower corporate taxes will just fuel useless stock buybacks, making the rich richer, but doing nothing to grow the corporation and grow jobs).

Capital-gains tax breaks, on the other hand, have always been a terrible idea. The notion that such breaks cause people to reinvest their tax savings into creating new factories and jobs is not only proven wrong by thirty-plus years of history (see chart above for just the last decade of decline), but it is ludicrous in concept (even without historic proof):

Why would you reinvest your tax savings from your capital gains (say from the sale of stocks) into building a new factory? Why would you EVER do such STUPID thing when your government is assuring you that you can just buy and sell stocks the rest of your life and get taxed at a special lower rate? Why, especially would you do such a dumb thing when your central bank is assuring you they will keep fueling rising stock prices by giving speculators more free money to invest?

If you ignore the government’s double enticement to simply buy and sell stocks and, instead, reinvest your tax savings into building a factory, you have to …

 

  • create a business with all that is legally and financially involved,
  • hire people,
  • manage all business activities,
  • deal with all kinds of human problems,
  • take on huge financial risks that profits may never materialize,
  • take on huge future liabilities from the injury or harm that manufacturing can cause,
  • finally, find a market for your product and develop it.

 

Then, after you have done all of that, you are assured that any of the money you make at that hugely laborious enterprise will be taxed at a higher rate than your first money was taxed at because it is all ordinary profit. Why on earth would you do all of that when you can simply keep making money off of capital gains from speculatively buying and selling stocks in a market supported by your friendly central bankster while paying lower taxes for taking the easy route and, so, multiply your money faster?

No investor is that dumb! And, yet, Republican politicians continue to parade the lie that a lower cap-gains rate stimulates the economy. Worse yet, blue-collar Republican voters keep believing the lie. Lower cap-gains tax rates just stimulate capital asset markets, raising housing prices and raising stock prices and raising the prices of football teams. It’s all easy money that produces NOTHING!

Continue to fall for voodoo economics if you want to, but then you deserve to remain in one of the lower bars in the graph above for the rest of your declining life. Or admit you’ve been swindled. Own your own part in being foolish if you bought into the trickle-down lie, and then direct your anger at those who swindled you and start clawing back those ill-gotten gains (through legal means, of course).

  • Auldenemy

    Lowering corporation tax has been the thing in the West for decades and as you say achieves very little, if anything at all considering that big corp. chiefs use tax advantages not to invest in new infrastructure and grow their employee base, but rather to chuck into Buy Backs so as to make themselves and their share holders ever more rich without risk. Ireland is a prime example of big corp. world getting away with minimal tax. It has a 12% corporation tax which is why vast companies like Amazon use it as there European base. The EU is starting to resent this and demanding more taxes from big corp. also that Ireland stops offering such sweet tax deals to these huge companies. This is somewhat ironic considering the unelected EU Commission President, Juncker, gave endless sweet heart tax deals to big corp. world when he was President of Luxembourg (for 20 years). The UK has reduced corporation tax and would love to reduce it further.

    The problem with most voters is not that they approve a system that by cutting taxes to the rich only helps to make themselves poorer, but rather that most voters don’t even know what corporation tax is, or certainly don’t know what Buy Backs are. It is ignorance that parasitical elites have always relied upon to fool, control and rob the masses. Kings did it by not allowing the common man to learn to read. The parasitical elites of our age have done it by dumbing down our education system; filling it with Neo Liberal BS. The last thing they want is an electorate that understands how CBs operate, what QE means and the endless ways wealth is syphoned from the masses to the few. The tragedy of our junk food, junk entertainment and thus junk thinking West is that too many of us are now literally more stupid than our peasant ancestors of the 15th Century.