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January 28, 2019 | The Real Problem With AOC’s Tax Hike

Is an American author of books and articles on economic and financial subjects. He is the founder and president of Agora Publishing, and author of the daily financial column, Diary of a Rogue Economist.

DELRAY BEACH, FLORIDA – Americans seem to be getting on board the “tax the rich” train faster than they can sell tickets for it.

We thought it would take at least a couple of years… and a recession… to bring them around.

But no.


Rich Pariahs

Envy is readily disguised as “virtue signaling,” and larceny is easily confused with reducing “inequality.”

And now, rich people are the new pariahs. Behind every one of them is a crime, the liberals say; and if it’s not a crime now, they’ll make it one.

The Hill reports:

Rep. Alexandria Ocasio-Cortez (D-N.Y.) and her Republican critics have both called her proposal to dramatically increase America’s highest tax rate “radical,” but a new poll released Tuesday indicates that a majority of Americans agrees with the idea.

In the latest The Hill-HarrisX survey – conducted Jan. 12 and 13 after the newly elected congresswoman called for the U.S. to raise its highest tax rate to 70 percent – a sizable majority of registered voters, 59 percent, supports the concept.

And polling shows that Americans are warming up not just to tax hikes, but to the rest of Ms. Ocasio-Cortez’s programs, too.

Gallup adds:

47% of Democrats view capitalism positively, down from 56% in 2016.

57% of Democrats now view socialism positively, little changed from 2010.

For the first time in Gallup’s measurement over the past decade, Democrats have a more positive image of socialism than they do of capitalism.


Trotsky in Drag

As for ourselves, we have mixed feelings. A war between the haves and the have-nots seems to be coming. Our guess is that both sides will lose.

Which is okay with us; we don’t like either of them.

But claptrap annoys us. And we prefer an honest stick-up man to a slick embezzler. Give us a tax increase over deficit financing; at least we’ll know what’s going on.

And now, there’s no doubt. The rich are on the table. And all leading Democrats are getting out their knives and forks.

Here’s Bloomberg:

As U.S. Democrats lay the foundation of their bid to unseat President Donald Trump in 2020, raising taxes on the rich is emerging as a central theme for a party being pulled to the left by its invigorated progressive wing. Spurred on by the social media-fueled phenomenon of Alexandria Ocasio-Cortez, the youngest woman ever elected to the U.S. House of Representatives (and so young she can’t seek the presidency herself), other Democrats planning or considering a run are producing a bevy of proposals for how to draw more money from the most affluent. Ideas include a “wealth tax” on assets, much higher marginal rates on big annual incomes and a new tax on financial trades, all in the name of raising more money for new government programs while making a dent in rising inequality.

When we first mentioned the proposal from AOC to raise the top tax rate to 70%… many of our dear readers gasped in horror: Socialism!

Trotsky in drag, disguised as a young woman from Queens! Doom must be right around the corner. They were right, of course.

Doom is around the corner. But not because of Ms. Ocasio-Cortez and her tax hike.


Soak the Rich

When the insiders get finished with it, the new tax will raise pitifully small amounts of money. And most rich people will dodge around it. That’s what they pay the lobbyists for.

The new tax will not alleviate inequality, either. The rich will still be rich. And the fake money system that magnified their wealth so remarkably will still be intact.

But American politics is always more showbiz than public policy management.

The serious decisions are made by the insiders. It doesn’t matter what “the people” think… as long as they don’t threaten the Deep Staters who run the system.

Ultimately, the feds spend, directly, about 22% of GDP. They control, manipulate, or heavily distort another 20% (when you pay a tax preparer, for example, it is counted as a private sector expense; but it’s actually a cost of government).

The money has to come from somewhere. Traditionally, the liberals want to “soak the rich.” The “conservatives” want to soak the middle classes (no point in bothering with the poor; they don’t have any money).

And the Deep State – insiders, cronies, and the elite who actually run the show – don’t care who gets soaked as long as the honey keeps oozing in their direction.

And there’s the doom. Over time, more and more real output is twisted, bent, and corrupted to pay off the elite. Worse, the old leashes – common sense, fair dealing, limited time and resources – are slipped; claptrap runs wild.

Then, people think they can live at each other’s expense… and get rich by spending money none of them ever earned.

Tax increases, like tax cuts, are just part of the scam. The December 2017 tax cut pretended to boost the economy; the next tax hike will pretend to sock it to the rich.

Who wins? Who loses?

Who cares?

The beat goes on… the parasites grow bolder… and the real economy weakens.




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January 28th, 2019

Posted In: Bill Bonner's Diary

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