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David Stockman: Soak the Rich (with a 30% wealth tax)
Barron's ^ | October 11, 2013 | Robert Milburn

Posted on 10/14/2013 5:45:35 AM PDT by reaganaut1

David Stockman is at it again. The Reagan-era budget director caused an uproar in 1981 by publicly decrying the moves of his boss to spur the economy with tax cuts. Now a private investor and author, he’s pushing for a huge new tax on big earners. Stockman would subject the nation’s top 10% of households to a levy equal to 30% of their wealth, payable over a decade. Without it, he maintains, the U.S. will wind up in a horrific, Greece-style debt wreck.

Stockman, 66 years old, recently talked up his plan at an ­unlikely forum: New York City Junto, a monthly soirée of libertarians organized by hedge-fund manager Victor Niederhoffer. The tax-averse crowd listened politely as Stockman laid out his case. For starters, he said, the long-term budget outlook is much bleaker than the “rosy, Keynesian nonsense” put out by the Congressional Budget Office. Stockman reckons U.S. debt, now $17 trillion, is headed to $30 trillion, or 150% to 200% of gross domestic product. “That is a nonstarter, and that takes the system down,” Stockman said. The CBO’s baseline projection puts debt at 130% of GDP by 2050.

The wealth tax, Stockman said, could go a long way toward stabilizing things. It would be part of a broad package of measures he has in mind to bring the deficit down and keep it low. The tax wouldn’t be permanent—it could be lifted in 10 years or so, when debt has dropped to a more manageable 30% of GDP. Interestingly, Stockman, a multimillionaire, would be subject to his own tax.

But Stockman is the first to admit that the proposal may never fly in Washington.

(Excerpt) Read more at blogs.barrons.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: davidstockman; taxes; wealthtax
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Do you think Obama and other Rats have a philosophical disagreement with this idea?
1 posted on 10/14/2013 5:45:35 AM PDT by reaganaut1
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To: reaganaut1
The wealth tax, Stockman said, could go a long way toward stabilizing things.

It wouldn't stabilize anything. It would just give them license to spend more.

2 posted on 10/14/2013 5:47:07 AM PDT by raybbr (I weep over my sons' future in this Godforsaken country.)
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To: reaganaut1

Actually, YES! They’re rich. Dems are all about “pain for thee, luxury for me.” They’ll never go for it unless it only affects the conservative wealthy.


3 posted on 10/14/2013 5:47:39 AM PDT by apoxonu
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To: reaganaut1

It would be hysterical to watch Soros and Theresa Heitz Kerry if something like that passed. Also all the Hollywood types LOL. It would be worth it just for the entertainment factor.


4 posted on 10/14/2013 5:48:31 AM PDT by McGavin999
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To: reaganaut1
The tax wouldn’t be permanent

Yeah, right.

5 posted on 10/14/2013 5:50:48 AM PDT by Izzy Dunne (Hello, I'm a TAGLINE virus. Please help me spread by copying me into YOUR tag line.)
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To: reaganaut1
Though I oppose the concept in principle, this is exactly what needs to be proposed - and thrown in the faces of those Democrat-supporting "rich" who have slithered out of all previous attempts to make them pay for the giant government they advocate. Stockman knows full well a wealth tax is radioactive inside the Beltway, but he has actually done opponents of big spending a huge service by publicly advocating it.

MSM commentators and Democrat politicians alike are going to have a hard time selling the public on a wealth tax being a bad idea, while more income taxes are somehow just fine.

6 posted on 10/14/2013 5:52:12 AM PDT by Mr. Jeeves (CTRL-GALT-DELETE)
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To: reaganaut1

Didn’t David Stockman become a Democrat twenty years ago?


7 posted on 10/14/2013 5:53:00 AM PDT by GOPJ (Brieitbart sent me... Freeper newfreep)
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To: McGavin999
It would be hysterical to watch Soros and Theresa Heitz Kerry if something like that passed. Also all the Hollywood types LOL. It would be worth it just for the entertainment factor.

Don't kid yourself. There would be tailored exemptions for people like these. It's the people who worked and saved their whole lives who would get hit.

8 posted on 10/14/2013 5:55:21 AM PDT by from occupied ga (Your government is your most dangerous enemy)
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To: reaganaut1
The tax wouldn’t be permanent—it could be lifted in 10 years or so


9 posted on 10/14/2013 5:56:00 AM PDT by Constitutionalist Conservative (I'm a constitutionalist, not a libertarian. Huge difference.)
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To: reaganaut1

I would consent to a one-time wealth levy. It must be tied to the ratification of essentially all of Mark Levin’s Liberty Amendments.


10 posted on 10/14/2013 5:57:59 AM PDT by jimfree (In November 2016 my 13 y/o granddaughter will have more quality exec experience than Barack Obama)
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To: reaganaut1

And once all that wealth has been confiscated will the government promise to stop spending money it doesn’t have?


11 posted on 10/14/2013 6:00:14 AM PDT by CaptainK (...please make it stop. Shake a can of pennies at it.)
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To: reaganaut1

So Zuckerberg and those left-wing nuts from Google who put their money in the Grand Caymans to avoid US taxation will LOVE this, right?

How about all those left-wing Wall Street types who fork over millions to their Democrat political patrons? They’ll love it too, right?

How about all those Hollywood types? They’ll be making YouTube videos supporting this, right?


12 posted on 10/14/2013 6:02:44 AM PDT by Obadiah (I Like Ted.)
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To: reaganaut1

He needs a liberal application of superglue and shredded foam...


13 posted on 10/14/2013 6:03:47 AM PDT by Little Ray (How did I end up in this hand-basket, and why is it getting so hot?)
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To: reaganaut1
Four or five years of a 30% "wealth tax" and there will be no "wealth" left to tax.

Everything will then belong to the US feral government.

Isn't that nice?

14 posted on 10/14/2013 6:08:08 AM PDT by E. Pluribus Unum (Who knew that one day professional wrestling would be less fake than professional journalism?)
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To: reaganaut1

When all you have is a hammer, every problem looks like a nail.

The problem is increasing concentration of wealth. David Stockman’s solution is a 30% direct tax on that wealth. But does anybody think that current trends will not far outstrip that 30% over the next ten years?

The problem is the ossification of the economy. Winners become winners, and the guy starting out from the bottom never stands a chance. This sad state of affairs is the direct result of government policy. Government intervenes in the market, time and time again, in favor of the wealthy. They are picking winners and bailing out the losers, but these recipients of government largesse are always, always, always, wealthy and well-heeled.

The way to correct this problem is not to increase taxes and increase government intervention. The way to do it is to let the rough and tumble of the market operate. If the big fish can hold onto what they have on their own, fine. But if a thousand little fish can pull one down, that’s fine, too.

The bankruptcy of GM, as painful as it would have been in the short term, would have been a great tonic for our economy. Those productive assets would have been redirected into profitable endeavors and people who invested stupidly would have taken it in the neck. That is just as it should be.

Instead, we have a zombie company, taking up space in the market, sucking up capital, and producing nothing useful whatsoever. But the rich stayed rich, and that is what matters to Washington in the end.


15 posted on 10/14/2013 6:08:57 AM PDT by Haiku Guy (Gun Control Haiku: Say "Registration" / And they call you paranoid / So say "Privacy")
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To: McGavin999
It would be hysterical to watch Soros and Theresa Heitz Kerry if something like that passed.

Soros' wealth is already offshore. Kerry's would soon follow. As would mine... and me.

16 posted on 10/14/2013 6:09:16 AM PDT by Pearls Before Swine
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To: Mr. Jeeves
...this is exactly what needs to be proposed - and thrown in the face of...

...Warren Buffett.

17 posted on 10/14/2013 6:09:42 AM PDT by E. Pluribus Unum (Who knew that one day professional wrestling would be less fake than professional journalism?)
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To: E. Pluribus Unum
Four or five years of a 30% "wealth tax" ...

He's proposing 30% over 10 years... which is more like 2.5 to 3% per year. But I agree, this sucks!

18 posted on 10/14/2013 6:10:31 AM PDT by Pearls Before Swine
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To: reaganaut1

This is not crazy.

Trump and his Wharton buddies came up with a similar plan to prepay estate taxes early at a discount.

Most of his rich friends thought it was a brilliant idea.

One variant to Trump’s plan calls for a certain amount of the estate tax to be paid over three years by buying US Treasury bonds and bills on the open market and then turning them in to the Treasury for cancellation.

If I remember correctly, the Trump tax would bring in about $5 trillion and would lower the interest expenditure about $350 billion per year. This would put a balanced budget within reach.


19 posted on 10/14/2013 6:11:01 AM PDT by Andy from Chapel Hill
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To: reaganaut1

The guy is an idiot. No matter how much money the government gets it will never be enough. Put on your jackboots and take 100%. Still wont be enough, next year they’ll need more. The only way to get things under control is to cut back on, even wholesale eliminate, many if not all entitlement programs. Without significant reform (ie elimination) these programs’ insatiable thirst for resources will destroy us. Not may, not could. They will destroy us. The takers class will grow without bound while the percentage of makers will atrophy and die.


20 posted on 10/14/2013 6:12:20 AM PDT by ThunderSleeps (Stop obarma now! Stop the hussein - insane agenda!)
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To: McGavin999
It would be hysterical to watch Soros and Theresa Heitz Kerry if something like that passed. Also all the Hollywood types LOL. It would be worth it just for the entertainment factor.

If you think Obama gave out a lot of exemptions for Obamacare, wait til you see how long the exemption list would be for this tax.

21 posted on 10/14/2013 6:12:28 AM PDT by Cementjungle
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To: reaganaut1

Twelve days ago, the luxury tax on expensive cars expired. It was the last of the luxury taxes that the first President Bush signed in 1990 as part of the budget agreement in which he broke his “read my lips, no new taxes” pledge.

The agreement was brokered Sen. George Mitchell , D-Maine , then majority leader. And the luxury tax was supported by Sen. Ted Kennedy, D-Mass.

The luxury tax applied not just to cars, but to jewelry, furs and private planes, and to expensive boats — yachts.

Not So Lucrative

Congress estimated that in 1991 these luxury taxes would rake in $31 million. But the actual sum was just $16.6 million.

Why? Because, to the surprise of no one except tax-raising politicians the luxury taxes caused people to buy less jewelry and fewer expensive cars, planes, and, especially, yachts.

The tax destroyed jobs — an estimated 25,000 of them in the boat-building industry, much of which is in New England — in Sen. Mitchell’s Maine and Sen. Kennedy’s Massachusetts.

Job losses cost the government more than $24 million in unemployment benefits and lost income tax revenue. So the luxury tax actually cost the government money.

New England’s boat-building industry was still so devastated by 1999 that another Kennedy — Ted’s son Patrick, a Rhode island congressman — actually proposed a federal subsidy to help rich people buy yachts. He called it, “exactly the opposite of a luxury tax.”

Remember this costly farce when you hear talk about helping the common folks by taxing the rich.

http://abcnews.go.com/ThisWeek/story?id=132568&page=1


22 posted on 10/14/2013 6:12:32 AM PDT by lowbridge
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To: reaganaut1

David’s 15 minutes were up two decades ago...


23 posted on 10/14/2013 6:13:52 AM PDT by Eric in the Ozarks ("Say Not the Struggle Naught Availeth.")
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To: Haiku Guy

I’m guessing this article was posted due to the hype in the title. But if you read the entire thing, I basically agree with everything Stockman says in it, save for the concept of the wealth tax. The Fed has created bubble upon bubble the last 15 years and it is what has driven the “economy”

In the meantime big government and big business have become somewhat indistinguishable from each other, which in the long run is going to completely stifle economic growth and trample on US economic freedoms.


24 posted on 10/14/2013 6:14:08 AM PDT by SteveAustin
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To: reaganaut1
Go back to funding FedGov™ with tariffs and consumption bases taxes and ditch the income tax. The USA's economy would soar to new heights. Tis is what the founder's wanted...

Anyone who says that this idea is "crazy" is both directly and indirectly supporting socialism and progressivism.

25 posted on 10/14/2013 6:14:42 AM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: jimfree

Any solution to our economic problems, and they are many, cannot be tied to one part of the public. All must feel the pain equally or as equal as one can make it. Anyone receiving Federal money, must consider a forty percent cut from the get go as a minimum. Once the forty cents on the dollar debt the government is acquiring every year is under control, by shutting off the debt ceiling increase. then the remaining overspending on entitlements must be brought under control.

Government hiring must cease immediately, as there is no rhyme or reason to increase the size of government already at a minimum fifty percent larger than need be. That is an arbitrary number as a starting point to bring things under control. Retirees, and those who leave government may be replaced on a one for three basis. The bottom line remains everyone must feel the pain. Pain now will be far easier to tolerate than pain expected the longer it takes to reach the total tipping point.


26 posted on 10/14/2013 6:20:22 AM PDT by wita
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To: reaganaut1
Without With it, he maintains, the U.S. will wind up in a horrific, Greece-style debt wreck.

Fixed

27 posted on 10/14/2013 6:21:40 AM PDT by listenhillary (Courts, law enforcement, roads and national defense should be the extent of government)
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To: Pearls Before Swine

I am not a math guy, but if the government cut 10% across the board with a 5 year no growth policy, got rid of redundant departments and sent home every illegal alien currently incarcerated and their families, would that make a dent?


28 posted on 10/14/2013 6:21:46 AM PDT by EQAndyBuzz (President Stompyfeet....Priceless.)
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To: reaganaut1
The tax wouldn’t be permanent

Riiiiiiiiiiiiiiight.

29 posted on 10/14/2013 6:23:01 AM PDT by dfwgator
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To: reaganaut1
I am confused, how would this idea work in practice? An asset is only worth something because there are willing buyers at a certain price. If you tell the top 10% to liquidate 3% of their assets, there has to be buyers, but the buyers would be busy selling to come up with funds to pay their tax, and the price would collapse from lack of buyers. I don't expect the remaining 90% to have enough cash to take advantage of the cheap stocks.

If the government instead says, sign over 3% of your assets, the same problem exists, only it is the government that has to find, or print, the ready cash. I don't see how this turns into spendable money.

I am now taking the Hillsdale economics 101 class, so go easy on me if this is a stupid question.

30 posted on 10/14/2013 6:24:19 AM PDT by AdSimp
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To: EQAndyBuzz

Just who do you think there rich folks vote for and support? It ain’t us. Think Warren Buffett/Soros.


31 posted on 10/14/2013 6:25:01 AM PDT by DIRTYSECRET (urope. Why do they put up with this.)
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To: EQAndyBuzz

Wouldn’t your solution be better? Of course. But no one will ever propose it.


32 posted on 10/14/2013 6:25:07 AM PDT by Pearls Before Swine
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To: wita

Oh PS I forgot a couple of items. The Fed must allow interest rates to rise normally, that should really scare the hell out of anyone with a rudimentary understanding of economics, and finally good luck getting any of this by the Senate, much less the occupant of the white house.


33 posted on 10/14/2013 6:26:08 AM PDT by wita
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To: Mr. Jeeves

Tax Hollywood!


34 posted on 10/14/2013 6:26:27 AM PDT by dfwgator
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To: reaganaut1
"The tax wouldn’t be permanent—it could be lifted in 10 years or so"

cat mirror photo catmirror.gif
35 posted on 10/14/2013 6:28:57 AM PDT by silverleaf (Age takes a toll: Please have exact change)
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To: from occupied ga

Oh I already know that, I also know it will never EVER happen. I am just sickened by the people who push the “Tax the Rich” stuff are the mega-rich who know darned well it will never apply to them.


36 posted on 10/14/2013 6:29:33 AM PDT by McGavin999
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To: reaganaut1

I don’t think they have a disagreement with it.
A 30% wealth tax means people end up transferring assets to the government. You could live on your farm, but it is now restricted as a future national park. You run your business, but must give jobs to government cronies or sell it to the state and become an employee.


37 posted on 10/14/2013 6:39:46 AM PDT by tbw2
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To: raybbr

>> It would just give them license to spend more.

Nailed it.


38 posted on 10/14/2013 6:42:48 AM PDT by Nervous Tick (Without GOD, men get what they deserve.)
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To: reaganaut1

I’ve got to say I have mixed feelings about the idea. It would be horrible for economy and I think is is morally equivalent to armed robbery but....

Most of the dem elite have already made theirs, income tax does not affect them, if you are ever going to get their skin in the game, it will be in the form of a wealth tax. The IRS taking 30% of the Kenendy clan’s money gives me a little tingle running up my leg.

That being said, I am still against it because it runs contrary to my values.


39 posted on 10/14/2013 6:45:15 AM PDT by dangerdoc (see post #6)
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To: McGavin999
RE Hollywood paying a wealth tax. Here's how Will Smith reacted to the French 75% nicome tax:

The interviewer then said, “Do you know how much in France you would have to pay on earnings above 1 million euros [French President Francois Hollande's proposal]? Not 30 percent – 75 percent.”

At that point, Smith said, “75? Yeah, that's different, that's different. Yeah, 75. Well, you know, God bless America.”

40 posted on 10/14/2013 6:50:30 AM PDT by citizen (There is always free government cheese in the mouse trap.....https://twitter.com/kracker0)
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To: reaganaut1

When governments move beyond taxing incomes to confiscation, you know the end of that government is near. It is the fiscal equivalent to a malignant tumor which will soon kill its host; in this case the productive working public.

This will end the way it always has ended throughout history with the eventual collapse of the government. It’s inevitable. The cancer does not want to be told that it is the problem.


41 posted on 10/14/2013 6:51:46 AM PDT by Flick Lives (The U.S. is dead to me.)
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To: reaganaut1

Okay....pulling the Marines out of Lebanon after the bomb, nominating Sandy Day O’Connor and hiring THIS guy....the Gipper made THREE bad moves.


42 posted on 10/14/2013 6:55:46 AM PDT by Buckeye McFrog
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To: dangerdoc
Most of the dem elite have already made theirs, income tax does not affect them, if you are ever going to get their skin in the game, it will be in the form of a wealth tax. The IRS taking 30% of the Kenendy clan’s money gives me a little tingle running up my leg.

A wealth "tax" (confiscation, actually) would never apply to the ruling elites any more than Obamacare.

43 posted on 10/14/2013 6:56:29 AM PDT by Flick Lives (The U.S. is dead to me.)
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To: Buckeye McFrog

I love Ronald Reagan, the best president of my lifetime, but he made some additional bad moves.

His 1986 Amnesty, which he later regretted......supporting the Brady Bill......picking George H. Bush as his VP.

Overall, though, he’s the only president I’ve actually missed when he was no longer in office.


44 posted on 10/14/2013 7:08:31 AM PDT by july4thfreedomfoundation (The Second Amendment makes all the other amendments possible)
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To: Pearls Before Swine

Or is it 30% each year for 10 years? I think it is this.


45 posted on 10/14/2013 7:09:14 AM PDT by SgtHooper (The last thing I want to do is hurt you. But it's still on the list.)
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To: Mr. Jeeves

Good point.

The income tax is not a tax on the rich. It’s a tax on people trying to get rich. Is it any surprise that people who are already rich support heavy taxes that prevent others from joining their ranks?

The real rich in this country support democrats because they know the Constitution frowns on wealth taxes, and so the Democrats can tax all the income they want but they’ll never take the principal that wealthy people have already stored up.


46 posted on 10/14/2013 7:15:46 AM PDT by edwinland
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To: reaganaut1

Just when I was starting to like Stockman again.


47 posted on 10/14/2013 7:20:54 AM PDT by DaxtonBrown (http://www.futurnamics.com/reid.php)
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To: reaganaut1

One of Ronald Reagan’s biggest mistakes was in not firing this idiot at his first public insubordination.

A BUDGET DIRECTOR WHO QUESTIONS THE PRESIDENT’S PRIORITIES????? Stockman is garbage—recycled garbage.


48 posted on 10/14/2013 7:26:11 AM PDT by SC_Pete
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To: McGavin999

Agreed. More scenes we’d like to see. Of course Democrats will never go along with it. They have an uncanny willingness to spend other people’s money. But when it comes to their own, not so much.


49 posted on 10/14/2013 7:27:49 AM PDT by Hoodat (BENGHAZI - 4 KILLED, 2 MIA)
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To: jimfree
I would consent to a one-time wealth levy.

And I'd consent to a leprechaun leaving his gold on my door step, a unicorn for my grand-daughter to play with, and mermaids in the local lake to talk to while fishing.

There's no way such a powerful tool would ever be given up by the powers that be.

50 posted on 10/14/2013 7:29:17 AM PDT by slowhandluke (It's hard to be cynical enough in this age.)
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