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Examples of extreme inequality are becoming easier to find. Progressive leaders have us thinking about
revolution. If a revolution is to take place, Americans - especially young Americans - need to know the facts, and they need to know how they're getting cheated, and they need to get
angry. The following should help.
1. $1,000,000,000,000,000 in Sales. Not One Cent for Sales TaxThe trading volume on the
Chicago Mercantile Exchange (CME) reached an incomprehensible $1 quadrillion in notional value in 2012. That's a thousand trillion dollars. In comparison, the entire U.S. GDP is $17 trillion.
On that quadrillion dollars of sales CME
imposes transfer fees, contract fees, brokerage fees, Globex fees, clearing fees, and contract surcharges, many of them on both the buyer's and seller's side. As a result, the company had a
profit margin higher than any of the top 100 companies in the nation from 2008 to 2010, and it's gotten even
higher since then.
But not a penny in sales tax for the taxpayers who provide
publicly-funded infrastructure, technology, systems of law, and security to help them process
billions of financial transactions.
Instead - incredibly - CME complained that its taxes were too high, and they demanded and received an
$85 million tax break from the State of Illinois.
2. A Single Tax-Avoider Made More Money in 2013 Than ALL the Emergency Responders in the U.S.Warren Buffett watched his net worth grow by
$12 billion in one year, much more than the $8.3 billion our country
spends on almost a quarter-million Emergency Medical Technicians and Paramedics.
Meanwhile, his company, Berkshire Hathaway, hasn't been paying its taxes. According to the
New York Post, "the company openly admits that it owes back taxes since as long ago as 2002." A review of Berkshire Hathaway's
annual report confirms that despite profits of almost $29 billion in 2013, a $395 million refund was claimed, while $57 billion in federal taxes remain
deferred on the company's balance sheet.
Berkshire Hathaway does report an income tax expense. But all of it, in the company's own words, is hypothetical.
3. Walmart: $13,000 per U.S. Employee Taken in Profits, $4,000 per U.S. Employee Taken from TaxpayersIt gets worse. In addition to Walmart's
$19 billion in U.S. profits last year, the four Walton siblings together made about
$29 billion from their personal investments. That's over $33,000 per U.S. employee in profits and family stock gains. Yet they pay their
1.4 million American employees so little that the average Walmart worker depends on about
$4,000 per year in taxpayer assistance, for food stamps and other safety net programs.
How does Walmart spend its profits? Instead of providing a living wage for its workers, company management spent
$7.6 billion, or about $5,000 per U.S. employee, on stock buybacks, in order to further boost the value of their stock holdings.
4. U.S. Wealth Grew by $25 Trillion in the Recovery, but 90 Percent of Us Got NONE of ItU.S. wealth
grew from $47 trillion to $72 trillion in the four years after the recession, largely as a reflection of continued American productivity. In other words, a full one-third of the total wealth in the U.S. in 2013 was generated since 2009. But the richest 10% took
all of it.
That's $6 trillion per year in new wealth for the rich. In contrast, the total annual cost of 'entitlements' and the safety net is
less than $2 trillion.
One consequence of this redistribution of wealth is that more money has been transferred from minorities to prosperous white Americans. The richest 1% took
95 percent of the gain.
Less than two out of every hundred individuals in the richest 1% are black.
5. Extreme Fees: Nickeled and Dimed until the Retirement Fund is Almost GoneThe one- to two-percent fees don't seem like much, but savvy financial minds know better. It has been
estimated that the average underserved household spends $2,412 each year just on interest and fees for alternative financial services. Food stamp recipients have to
pay companies like JP Morgan to process their benefits. The unemployed are getting their benefits through
banks who issue fee-laden debit cards instead of cash. And it's not just low-income households paying the fees. A two-earner household with median incomes will
pay an average of over $150,000 in 401(k) fees over their lifetimes.
The fees are not only draining us individually, but also at the levels of local and state government.
Los Angeles last year spent more on Wall Street fees than it did on its streets. In
Detroit, financial expenses might approach a half billion dollars, in a city where homeowners can barely afford the water services.
Chicago may end up paying Morgan Stanley $9.58 billion for a $1.15 billion parking meter deal. And in
Rhode Island, it has been projected that the state will pay $2.1 billion in fees to hedge funds, private-equity funds and venture-capital funds over twenty years, the same amount the state will be taking from workers by freezing their cost of living adjustments.
Solutions?All these issues have solutions: a
wealth tax for (1) and (4) above; a minimum wage increase for (2); a
speculation tax for (3);
public banks and
Post Office banks for (5).
But the best solution may be another American Revolution.
. . . the million ton elephant in the room.
The common factor appearing in EVERY one of the class-warfare inciting examples he cites is corruption and/or sheer stupidity by government officials, federal, state, and/or local.
Let's take them in order:
1. Who accepted bribes, kickbacks, and/or other favors in order to write the tax laws that way? Were they not so busy yukking it up with their bribers, the bribees just might have written the tax laws in a reasonably fairer manner. Sure, the CME and friends gave the de facto bribes, etc., but it is the corrupt members of gov't who accept them and write legislation beneficial to their benefactors. It is idiotic to expect someone to NOT take advantage of tax loopholes that apply to them, so blaming the CME, etc. for not paying taxes they are not required to pay according to the law is just dumb.
2. Again, who writes the tax laws and why? What Buchheit conveniently fails to mention is that Buffet is again taking advantage of tax laws as they are written. While Buffett may be a slimeball for a host of other reasons, it is idiotic to expect him NOT to take advantage of tax laws that benefit him. When was the last time that Buchheit failed to take a tax deduction or exemption that he legally qualified for just because he thought he should pay more taxes than was required?
3. Even a child knows that if you put a pile of cash in front of anyone but the most moral of people and promise that he will see no adverse consequences, it will be gone pretty darn quick. Who writes the laws that enable this behavior and why? Not surprisingly, it is the corrupt people in our gov't who essentially take dictation from their benefactors to pass laws favorable to them. Buchheit once again blames the ones (in this case Walmart) seeking gov't favors and makes zero mention of the ones who use their powers to actually grant them by means of crafting laws in special ways. Common sense (and, believe it or not, simple economics) tells us that if bad behavior is subsidized, one gets more bad behavior. And what does our gov't do a lot of? It actually subsidizes bad behavior, and, to rub salt into the wound, the little guy pays for the subsidies that enable him to get screwed by those who receive them.
4. Buchheit's reasoning sinks even lower as he plays the race-baiting game instead of sticking with the actual issue. Through TARP (which did NOT get paid back contrary to gov't lies) and a myriad of other Treasury programs, tax advantages, legalizing fraud (elimination of mark-to-market), allowing the TBTFs to launder drug cartel money, repeal of Glass-Steagall, refusal to prosecute fraud, allowing re-hypothetication of funds, non-enforcement of securities laws, failure to properly regulate the derivatives market, debasement of the currency, etc., etc., etc. it is politicians, judges, and bureaucrats who have either stolen all that money for themselves and their friends or enabled the well-connected banksters/financiers/etc. to do so. In many cases, no laws were broken because they were written that way, in many others laws were broken but the corruption of those who are supposed to prosecute (federal and/or state) resulted in either no charges being filed or, at most, a slap-on-the-wrist settlement without admission of guilt. In most cases, the fines for such conduct were an order of magnitude or more less than the gains from the fraud. The bottom line is that the causes of the theft are the corrupt politicians, bureaucrats, and legal system that not only enables such behavior by the politically and financially well-connected but actually encourages it when they write applicable laws and regulations and then enforce (or don't enforce, as the case may be) them in ways that are beneficial to their friends.
5. In addition to not seeing things as they are, Buchheit apparently doesn't believe in holding people responsible for their own choices. Anyone paying excessive fees for normal banking services is doing so by choice. Credit unions and small, local banks generally offer essentially the same services with much lower fees than the large banks. As far as food stamp, unemployment, and welfare recipients being charged for use of these cards? That's right: favors to politicians/bureaucrats by the big banks in exchange for implementing these programs to use the bank cards, often without any real competitive bidding, etc. As far as state gov'ts paying high fees? Once again, it is generally crooked politicians that set up these programs in return for bribes and similar favors, and, quite frequently stupid voters approving them. Check out the story about the Jefferson County water system that bankrupted the county and a very few low level officials went to jail for accepting bribes but not a single banker was even prosecuted for offering/giving them, or the story about the school district near San Diego where the voters agreed that their kids and grandkids would have to pay back a bond issue ten times over just so the voters could spend "free" money now.
Bottom line is that Bruchheit seems content to incite class- and race-hatred in his screed and does not have the intellectual honesty to recognize the root cause of the problems: corruption in government. It should not be a surprise to find that bankers are greedy, or people try to defraud others for profit, etc., etc., it is just common human behavior. However, misbehavior by private individuals and companies would be punished by normal market forces IF those individuals and companies were not protected from the consequences of their misbehavior by laws and regulations enacted by their bought-and-paid-for politicians and bureaucrats. In addition, the problem is greatly exacerbated when those that are entrusted with ensuring that the system is fair and just are criminals themselves and, what makes it worse, have the power to impose by force the results of their criminal acts on everyone else. The enabler of the "root cause" is the idiocy of the electorate for voting for and overwhelmingly returning to office the corrupt, lying, thieves election after election just because they are promised rainbows and skittle-sh*tting unicorns.
The bulk of the "solutions" Bruchheit proposes are non-sensical and/or unworkable and would take way too long to thoroughly refute, but they clearly indicate that he is a statist who feels that it is a legitimate function of government to extract as much wealth as is feasible out of the population so that HIS pet programs/policies can be implemented/funded.