The Millionaires Tax

Throughout recorded world history man has relied on the “scapegoat” vehicle to gain support of enough of a power base to accomplish whatever the user’s goals are. In some cases there might actually be some accurate factual data to validate the theory, but it’s not necessary for the tactic to be successful, all that’s necessary is muster enough support to gain victory.

The”Millionares “tax, so intricately woven into the Obama message, is a classic example. On the surface it implies a simple fix to the deficit facing the US today. Tax the folks making a million dollars more than their current rate and we will; fix the problem, share the burden, and redistribute the wealth from those who have earned it to those who need it. (That is of course assuming that the Millionaires don’t actually need their own money nor have a right to do what they wish with it). This is a classic example of scapegoating the rival political group (who are not going to vote for you anyway so wtf) and feeding the “defenseless, downtrodden masses just enough shit to grow the mushrooms of dissent and get re-elected.

Several things should be noted about the reality of Millionaires income. At some point they have actually worked for it or been extremely fortunate. The tax laws currently in place since the mid 80’s created investment vehicles that benefit everyone who has the ability and foresight to plan ahead, by sinking income into capital gains. These capital gains come in a wonderful variety of options which encourage investment (savings). The entire point is to encourage savings by allowing tax free investment on the front and lower tax rates on the back. Thus Millionares can actually exist without having to work because they have planned well, or been lucky.

So taxing them should be easy right? Not so fast there bub. As it turns out 50 to 60 % of retiring boomers are invested in capital gain opportunities too. Most are not millionaires. So if the capital gains tax laws were changed it would penalize the middleclass retirement population that has flocked to these retirement havens at the government’s urging. In planer words it would victimize the “victims’ even more. It is a masterful deceit that absolutely no one is talking about.  And it might even work . Since the end game is to get re-elected and not to actually create the tax it can just disappear after the election.

Obama is clearly smart and educated enough to understand the intricacies of the economics of capital gains so it just reveals a much more sinister side, an ambivalence to the middle class that he assumes the persona of protecting.  The ultimate treachery, the wolf among the sheep.

Now one might argue that the corporate tax rate of successful business can be raised to offset the deficit. Of course history shows that successful guys can be successful offshore as well as on so they can simply leave and take their wealth with them.

One thing is for sure, folks will not give their money to the government or “gooberment” without a tussle .

Lastly the line between “classes” is a blurry line at best. Folks move in and out of socio economic groups, they are not static. So there is actually no merit at all in class warfare and the millionaire’s Tax.


13 Responses

  1. Actually, I think Newt is more cynical than Obama–“vulture capitalist” and all that. A true case of the pot calling the kettle black. But I agree with much of what you say. (See, I told you I wasn’t really a “liberal”.)

  2. OMG ‘hold on Elizabeth, it’s the big one honey, I’m coming to join you”

  3. Rofl, pt. Don’t get too excited 🙂 And was that a great TV show or what? The thing is that there has to be a balance. When you have a privileged class and wealth gets too out of balance, it’s deadly. Think French Revolution, the British monarchy, rhe Russian Revolution, the Arab “Spring”, etc. Somehow, the conversation has turned into one in which the poor and middle class are presumed to be the only ones who are resentful, who believe What’s mine is mine and what’s yours is mine too. But that isn’t the case. It’s the other way around. The rich have walled themselves into their moated castles. Noblesse Oblige only goes so far. Because people also have a powerful yearning for freedom. I think people just want to have an opportunity to be rich themselves, without the deck being stacked against them. .

  4. “The rich have walled themselves into their moated castles. Noblesse Oblige only goes so far. Because people also have a powerful yearning for freedom.”

    This is the part of the occupy movement that I do not understand at all. I can not see concrete examples of involuntary slavery or restraint. I see freedom and opportunity at every corner. Perhaps you can help me begin to understand.

    Capitalism offers everyone the same playing field to start out with. There is certainly a “success heiarchy” and people at the top conspire to keep all that they can, even at the expense of others, but that is life and reflects human nature. I so not see any governmental system that offers freedom of choice that can prevent humans from their natural instincts. Societal Laws can curtail excessive force but can not change human nature. Thus we have The Arabic Spring, Tiananmen Square, The French Revolution and the American Revolution.

    I’m saying I can’t see anything close to that situation in the USA unless our government grows and expands to a truly repressive entity.

  5. All of the above revolutions were against governments/rulers, I can understand that principle, it is part of my DNA. But today’s protests ignore the ever menacing tentacles of government and protest the behavior of successful people. Not only is that unprecedented in my universe, but it is entirely illogical. Wall street can’t help them, that is not what wall street does.They should better protest the EXISTING government.

  6. > Folks move in and out of socio economic groups

    Some individuals do, but I think it is very arguable, if not fact, that social mobility for the middle class is somewhat frozen while the rich are getting much richer.

    That’s not me, but Charles Murray, of the not very liberal American Enterprise Institute who I understand accepts the increased social inequality in “Coming Apart.” Of course, his explanation for why there is increasing inequality is not the same as the “liberal” explanation.

    > it is entirely illogical.

    You continue to idealistically cling to the ship of rationality (as I once did), but its name is Titanic. Where every Tom, Dick and Harriette can vote (a society NOT envisioned by the Founders or the original Constitution) rationality will rarely prevail. The ten second sound bite will. The average voter is not, and never will, be interested in more than that. Which is why I reject this form of democracy.

  7. You may be interested in the “liberal” response to that book:

  8. I’m familiar with Murray and I think he is “right on” in much of his analysis of what’s wrong with our country and how it can be :fixed.

    Here are his final thoughts in a recent WSJ article

    “That’s it? But where’s my five-point plan? We’re supposed to trust that large numbers of parents will spontaneously, voluntarily make the right choice for the country by making the right choice for themselves and their children?

    Yes, we are, but I don’t think that’s naive. I see too many signs that the trends I’ve described are already worrying a lot of people. If enough Americans look unblinkingly at the nature of the problem, they’ll fix it. One family at a time. For their own sakes. That’s the American way.”

    Couldn’t agree more.

    As for being naive in my believe in America, I can only respond by saying just because you have given up doesn’t make your thoughts any more accurate than mine. You have to decide what giving up has done to you. I refuse to quit on my country.

    Some day I will write about scallops and why we have them to harvest in Florida as an example of how one person can make a difference for the public good despite Governments inadequacies, and how democracy still works. Or maybe I will first write about how community activity for our kids gives us a common bond and ongoing fraternization among disparate socio-economic groups.

    But to return to my original topic, the wolf among the sheep is more divisive than any “leader” I can recall and all of his solutions fly in the face of Murray’s thoughts, which are “big government solutions” have made everything worse since the 60’s.

    The Millionaires Tax is a lie within a lie. The wolf will continue fleecing the public to propel a false America into the same morass that Europe is experiencing. Our solutions lie in the core fundamentals that are so admirable in much of America, hard work, sound capitalist economics, and family values. Government can not do this for us no matter how many false “programs” they waste our tax money on. If you believe in none of these I can easily see why you have given up.

  9. > the new upper class … whether they engage themselves and their
    > children in the rest of America or whether they isolate themselves
    > from it. The only question is which they prefer to do.

    My personal experience, from growing up in the Philippines, is that they will isolate themselves from it. We shall see…

    And let’s look at something very basic. How many of the elite send their kids to public school, to mingle with the lower classes? I suspect very few. It does not matter that they send their kids to private school because the public schools suck. So it starts there and then often continues private college, etc. Just as Murray outlines.

    I have no idea why the upper class would want to mingle with the lower classes. Their worlds are too different.

    > I refuse to quit on my country.

    I can accept that. But I have no country. I have citizenship, but I have no country. Not even the Philippines; I just grew up there. The most heinous crimes have been done “for country.”

  10. IN order to understand what people with kids do one has to attend the community based activities that they attend ie sports, culture, religion. Those activities reach across all socio-economic backgrounds. Until you do that your premise will be just a poorly informed opinion. Just spend a Saturday at Tom Brown Park during little league season and multiply that experience by 100,000 and you may begin to understand the cross polinization that occurs for families with kids. Then church, then cultural and performing arts. You don’t have to agree with or support it to understand that Millions of others mix their kids and themselves everyday with everybody. Those that are truly elite (isolated) make up such a small % of America that they fall out of the bell curve. (their last names are like Geithner)

    Hell, even George H Bush played little league.

  11. There are a lot of subtleties here that I can’t possibly address. Let me just say that the three of us come at the problem (and there is a problem) from three different viewpoints. Let me also start by saying that my extra-conservative friend Chris (also a recovering Democrat)says I can’t possibly be a “liberal” because I work every day, essentially. Which tells me that he has a misguided view of liberals. He has created a world in which there are those who work and strive and buy into American values, and those who just want to take what’s yours without earning it. In my observation, a typical worldview of conservatives. In that worldview, government is the servant of the have-nots. It exists to give away your hard-earned money to other people who don’t deserve it. My worldview says that government is the servant of business.
    In my view, government exists to protect its people. And it’s done a poor job of it on all fronts where financial protection is concerned. Surprise. We don’t just have to worry about terrorists from Afghanistan, we have to worry about our own people cutting the legs out from under us. (Read: Wall Street, to simplify it.) But would I choose to have business protect me or government? Two guesses. Government is not the villain.
    You mention “Occupy”. I’m not a fan. It seems immature and unfocused to me. The “message” comes across as, I’m mad, and I will camp out in a tent to prove it. But there does seem to be a hint of something there…
    When you have millions of Americans sinking lower and lower financially even when they are doing all the “right” things, then you have a serious problem.

  12. > truly elite (isolated) make up such a small % of America

    But isn’t that the group Murray is talking about?

    FN said: “My worldview says that government is the servant of business.”

    Not necessarily. Look at certain dictatorships and oligarchies. They serve a much smaller group. In the Philippines, it was often the same folks who ran the government and monopolies, either official or unofficial.

    The phone company was either a monopoly or government run. San Miguel was the only beer company I knew of and all ice cream was from Magnolia. Now, there are other beer companies and maybe one more ice cream company.

    You may recall Eric Estrada, an action movie star who may have been the first “commoner” elected Philippines President. After he started “acting up”, his VP, Gloria Macapagal Arroyo, daughter of a former President and one of the “elites” staged a “palace coup” that threw him out of office. The Philippine Supreme Court, all from the elite, declared that he had effectively “abandoned” office by often being drunk and away from the country or Presidential palace. He was not impeached, just told that he was no longer President.

    BTW, I just did a draft of my 2011 taxes and my tax rate dropped from 7.5% in 2010 to 3% in 2011! All because my “not taxable” income increased by about $5,000, most which I’ve not figured out why yet. I only shielded an additional $1,500; the State must have taken advantage of something for the other $3,500. I did notice that my “Social Security” wages dropped $5,000…

  13. Lol, spencercourt, when I say that government is the servant of business, I’m referring to the American government, not the Phillipine government 🙂

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