Posted on 12/05/2017 10:31:25 PM PST by Rashputin
Plunder Capitalism
Paul Craig Roberts
I deplore the tax cut that has passed Congress. It is not an economic policy tax cut, and it has nothing whatsoever to do with supply-side economics. The entire purpose is to raise equity prices by providing equity owners with more capital gains and dividends. In other words, it is legislation that makes equity owners richer, thus further polarizing society into a vast arena of poverty and near-poverty and the One Percent, or more precisely a fraction of the One Percent wallowing in billions of dollars. Unless our rulers can continue to control the explanations, the tax cut edges us closer to revolution resulting from complete distrust of government.
The current tax legislation drops the corporate tax rate to 20%. This means that global corporations registered in the US will be taxed at a lower income tax rate than a licensed practical nurse making $50,000 per year. The nurse, if single, faces in 2017 a 25% marginal tax rate on all income over $37,950.
A single person is taxed at a rate of 33% on all income above $191,651. 33% was the top tax rate extracted from medieval serfs, and approaches the tax rate on US 19th century slaves. Such an upper middle class income as $191,651 sounds extraordinary to most Americans, but it is so far from the multi-million dollar annual incomes of the rich as to be invisible. In America, it is the shrinking middle and upper middle class incomes that bear the burden of income taxation. The rich with their capital gains from their equity holdings are taxed at 15%.
Even single individuals who earn between $1 and $9,325 are taxed at 10% on their pittance.
The neoliberal economists who are the shills for the rich, Wall Street, and the Banks-Too-Big-Too-Fail claim, erroneously, that by cutting the corporate income tax rate to 20% all sorts of offshored profits will be brought back to the US and lead to a booming economy and higher wages. This is absolute total nonsense. The money won’t come back, because it is invested abroad where labor costs are lower, if invested at all instead of buying back the corporation’s stock or buying other existing companies. After 20 years of offshoring US manufacturing and professional tradable skills and the incomes associated with the jobs, who is going to invest in America? The American population has no income with which to purchase the goods and services from new investment, and the American population’s credit cards are maxed out.
All that is going to happen is that Wall Street will calculate the lower tax rate into a higher equity price. Wall Street can do this without any of the offshored earnings coming home. Suddenly, everyone who owns equities will experience a boost in wealth, or the boost has already occurred in anticipation of the handout.
The deficit-conscious Republicans have put into the Bill for Enhancement of the Rich’s Wealth, cuts in social services in order to “save workers from higher interest rates from budget deficits.” This is more dishonesty. If the Fed lets real interest rates rise to any meaningful amount, derivatives will unwind, and the Fed will have to create trillions more in new dollars to keep its ponzi scheme in place. The deficit that results from the tax cut will be covered by the Fed purchasing the Treasuries, not by a rise in interest rates.
What we are witnessing in the US and indeed throughout the western world is the total failure of capitalism. Capitalism is now merely a looting machine. The financial sector no longer supplies capital for production. What the financial sector does is to turn discretionary consumer income into interest and fee payments to banks. Aggregate demand can only grow through debt expansion, and the consumers reach a point where they cannot expand their debt.
Capitalism, hiding behind “globalism,” which is misrepresented as a good thing when it is death itself, locates production where labor is cheapest, thus depriving First World labor of good wages and work opportunities and putting First World countries on the path to becoming Third World countries. Short-term profits and executive and board bonuses and stock options are maximized at the cost of the destruction of the domestic consumer market.
Plunder Capitalism also privatizes as much of the public sector, such as the military, as possible, thus driving up the cost of the Pentagon’s budget. Jobs that the soldiers themselves formerly did are given to politically-connected firms. What was once KP (kitchen patrol) is now provided by an outside private service. Private mercenaries hired by the Pentagon collect as much in a month as troops in the line of fire earn in a year. I don’t know that the army any longer has a supply organization other than the private business that has the contract.
Medicare and Medicaid are the next to be privatized, along with Social Security. The tax cut will result in deficit and high interest rate hype, and these lies will be used to save the workers from high interest rates on their mortgage, credit card, and student loan debt by scaling back or privatizing Medicare, Medicaid, and Social Security.
The environment and public lands will be sacrificed to the private profits of timber, mining, and energy companies. Grizzly bears and wolves are losing their protection under the endangered species act so that states can sell trophy hunting licenses to men who have to prove their manhood by killing an animal with a high-powerful rifle at a safe distance.
What we are witnessing is the complete looting of America and the entirety of the West. While the Western World collapses, the insouciant, submissive people sit there sucking their thumbs while they are being ruined.
Nothing is left of the West except looters at work.
This tax bill is an abomination, an act of brutal plunder. Its sponsors should be tarred and feathered and ridden out of town on a rail, if not hung from a lamp post.
I'll wait and see but I sure don't detect any sea change in the thinking of the wealthy one percent who make the decisions.
I like this guy. Naysayer but we need them to keep from getting full of ourselves.
Corporations at 20% vs. a nurse. Sounds like Warren Buffett and his secretary. 10% for those under 10k a pittance? At least they now have skin in the game.
How can capitalism fail in the US? The US isn’t a capitalist country.
If the US fails it will be Socialism that causes the US to fail.
Socialism is wringing this country dry.
Good ideas but the Democrats will see blood run in the streets before they ever let that happen.
I don’t understand how Medicare could be privatized.
It would either be grossly unprofitable or have premiums the elderly couldn’t begin to afford. If it was grossly unprofitable, no business would get into it. And if the elderly can’t afford it, they’re back to taking half the prescriptions ordered and eating cat food. There are reasons Medicare was enacted.
Doesn’t the nurse pay the 35 percent tax for the corporation??
“The environment and public lands will be sacrificed to the private profits of timber, mining, and energy companies. Grizzly bears and wolves are losing their protection under the endangered species act ...”
This snowflake former “supply sider” is almost as hopeless and pathetic as Bruce Bartlett.
An insane old man who is in the same league as Lee Rockwell
Who gives a flip what he thinks?
Be sure and vote for Ron Paul every chance you get
Yes because corporations don’t pay taxes people do
This guy is a joke. He has produced nothing ever in his entire life
Creeping socialism is one of our major problems, a disease that when out of control destroys nations. The open, profusely bleeding, wound, of war in the ME, war we don't intend to win anyway, is an open, profusely bleeding, wound that's cost ten trillion over the past sixteen years is an immediate, life threatening, problem.
It's only human nature to focus on the theft you see and ignore the huge theft that's well hidden but the socialism that cost billions per year and will never go away as as long as it's such a useful tool of misdirection to hide the theft of trillions the Pentagon and Fed can't even account for.
Without the Globalist destruction of our manufacturing base and the Neocon BS about our being an empire rather than a nation, we could cure the problems that are used as bloody flags to wave in support of socialist illusions and end the rot of socialism.
wipeout....
no deductions...no way to save on taxes except to quit work...but then you won't be able to afford health care nor property taxes...
the CEO's are laughing similar to Tarp....
the point is a modest worker is being taxed much higher than the corporations....but of course corporations don’t pay taxes..
Drama queen...
Some say corps don’t pay taxes, so what’s the significance of a reduction?
Corps do pay taxes, and the equity holders ultimately pay those taxes. Tax reductions in fact retain cash rewarding the investors and other beneficiaries of the corp.
>> but of course corporations don’t pay taxes..
Wrong.
This is where the real theft happens; at the Federal Reserve with the cooperation of the US Treasury.
The real taxes are collected by the Federal Reserve Bank. The creation of money from whole cloth taxes the entire world and not just the citizens of the Unite States.
When the Fed magically creates new dollars the value of every preexisting dollar is diluted. Thus,m ever person in the world that holds US currency is taxed by the Federal reserve.
When the US dollar is no longer kept as a reserve currency in the world and all of that diluted currency comes flooding back in to the United States we will be nearly instantaneously be plunged in to an economic depression that makes the 1930s look like the roaring 20s.
That is completely false.
A single taxpayer gets a standard deduction plus a personal exemption worth $10,350.
In other words, you pay zero income tax on your first $10,350 of income.
Also, a single person who earns less than $15,000 total is eligible for the Earned Income Credit, and is also eligible for Medicaid in most states (via ObamaCare), or, if over 65 and eligible for Medicare, you pay no Part B monthly premium, no co-pays, and no Medicare deductibles.
Also, most elderly people pay no income tax on their Social Security pension.
Also, people over age 65 get almost $12,000 in standard deductions and personal exemptions, $1,600 more than younger people.
Re: “Without the Globalist destruction of our manufacturing base...”
Actually, adjusted for inflation, industrial production in the USA will probably set an all time record in 2017.
The previous record was set in 2007, just as the Great Recession was starting.
There are two main problems with our manufacturing employment base.
First, automation and expert software have reduced the number of employees necessary to produce the same amount of industrial products.
Second, since 1980, we imported close to 30 million low skill, low education LEGAL immigrants from Third World countries, and that huge surplus of workers has destroyed the pay scale for industrial jobs.
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