Austrian bump!
Hmmm.... a phenomenon shared between the dollar and bitcoin. The nebulous founders of BTC own "tons" of BTC at dollar equivalents of pennies, now valued around $838.
A peculiar thing happens on the way to trying to “tax the rich”.
It is like building a dam across a flowing river (the velocity of money). The dam is made up of differential tax rates, the greater the gross income, the higher the tax rate is assessed.. Add to this various prohibitions on how the cash flow may be spent (a combination of regulations and tax “incentives”), and the flow of capital begins backing up, ending up remaining in the hands of those who already had accumulated capital, that USED to flow downstream, but now no longer does. Result, the former steady flow dries up to a mere trickle, or stops altogether. Meanwhile, a huge volume of unexpended cash is held back by these regulations and fear of excessive taxation, and seeks another outlet, which may be back upstream, spilling out into a more hospitable terrain. This is why money flees to overseas markets and production facilities.
Tax rate decreases increase the total revenues generated, by vastly spreading out the pool of taxable income in the middle and lower income ranges. And this multiplier effect not only increases the tax yield from the more fully employed recipients of this capital flow, the capital continues to flow out to more and more individuals, further broadening the taxable base, at far greater impact than merely seizing the total assets of the very wealthy.
Part of the value of money (most of it, actually) comes from the velocity with which it moves from production to consumption, and flows back to further expand production. A stack of dollar bills, or a quantity of gold bars, or an electronic entry on a balance sheet, is nothing until it is converted from its storage value to actual production of goods and services. You can have the most potent fuel in the world, but until it is consumed in the production of useful work, it is just a hazard to all who are near it.
If the richest one percent held 99% of the wealth, that still wouldn’t mean that the remaining 99% of the population couldn’t live a very fantastic lifestyle.
The fact is, 80% of the wealth is held by the lower 99%.
80%, 99%, it’s not that big a deal.
Here we are again with the Marxists trying to explain why central government is the only way to nirvana.
F that S!
It seems to me that whenever the think tanks and sociologists examine what deprives the lower classes, particularly the middle class, of wealth, they never include government. People are taxed to death. Most families are two-income families because they have to be. And I work for a small company with three employees. Over the last 25 years, from withholding, our tiny little company of 3 employees (getting modest salaries) has sent over $1.4 million to the federal government.
bookmark for later.
Income inequality? Hah, humans are created equal in WORTH to God, but equal in brains, talent and ambition? Sounds like another one of Obama’s fairy tales.
Its even simpler than that. The Fed is printing money and giving it to large banks who use it to bump up the highest salaries. The Fed is also giving printed money to politicians who hand out free phones ($50 / month) to the "poor" but free loan guarantees ($500,000,000 a pop) to wealth investors in politically favored industries (e.g. "green").
Thanks for posting
That’s the whole point of central banks. Looting the nation for the elites who design the system.
Monetary inflation benefits people who want to take a bigger cut of the pie without asking. That would be government, banksters, and connected cronies. It also disproportionately benefits people with enough liquid assets to take advantage of inflation hedges.
It’s regressive taxation, and it’s destroying the country.
Bfl