The election cycle is in full swing. Divide and conquer is the law of the land. If we can be divided, we can be kept in our conquered condition. Let class warfare reign supreme!
- Tired of hearing about President Obama’s proposed 30% minimum tax for millionaires, a.k.a. the Buffett rule, and fairness for the middle class? Then here’s a different angle, courtesy of Alan Krueger, chairman of the President’s Council of Economic Advisors: It’s also needed for equity among the rich. After all, how can all the billionaires get along in Palm Beach if some of the 400 highest income Americans are paying an effective tax rate of below 10% and others are paying more than 30%? (Forbes.com/Janet Novack, “Another Arguement for Buffett Rules”)
Why indeed?
It is no secret that the rich have “recovered” quite well, thank you very much. Bernanke’s stock-pumping “wealth effect” has restored much of the wealth of the already-wealthy, while the middle class is suffering the death of a thousand cuts (food and energy prices skyrocketing while wages stagnate) and the working poor are experiencing a genuine Depression. Meanwhile, of the 49% of the electorate which receives some kind of government money, many / most of them can be relied on to vote for an ever-greater share of the output of the ever-shrinking producer class. Frankly, as a group IMO they are no longer worth discussing.
No matter what your politics are, the simple fact remains: WEALTH CANNOT BE REDISTRIBUTED IF IT HAS NOT FIRST BEEN PRODUCED. And how, pray, is wealth produced? By labor, and capital, working together. So who benefits when wedges are driven between labor and capital? Venal politicians in love with the trappings of power, and left-wing idealogues who genuinely do hate capitalism, that’s who. Who suffers? Stupid people who buy into the divisive rhetoric, along with sadly outnumbered smart people who can only shake their heads at the stupidity of it all.
Here is Hong Kong’s tax structure, (from LowTax.net) in a nutshell:
- Tax Rates in 2011
Individual
The standard rate of Salaries Tax is 15%.
Corporate
The normal rate of Profits Tax is 16.5% for corporations and 15% for unincorporated businesses.
Capital gains
Hong Kong does not levy capital gains tax.
Indirect Taxes
Hong Kong does not levy value-added tax (VAT), goods and services tax (GST) or sales tax.
- Other Taxes
Estate Tax was abolished in 2005.
Stamp duty on immovable property is charged at rates up to 4.25%, depending on the sale or transfer price of the property. However, to curb property speculation, the government introduced a Special Stamp Duty (SSD) on residential property in November 2010. Further measures to discourage speculation in the property market have not been ruled out by the government.
Withholding Taxes
There are no domestic withholding taxes on dividends, interest or royalties
Salaries are taxed at 15%, and “profits” from the evil money-grubbing corporations and rich people are taxed at…16.5% and 15%. Imagine! How radical! It is also interesting that this 16% or so tax rate is about the same as was discussed in early “flat tax” proposals here. A much fairer system, not to mention friendlier to the producers of wealth (you know, people who actually WORK in the private sector), and one which does not lend itself to the creation of election-year media blitzes seeking to pit people against each other. Which means, it will never be adopted here.
The one thing I do disagree with is the differentiation where capital gains are not taxed. I am beginning to consider such discrimination unwarranted and unwise. In the Wall Street-dominated American sector, it has become too easy for wealth to be stripped by “players” instead of being produced. Trading treats the economy as a zero-sum game, where some win while others must lose in order to balance the system. International banks have become casinos where trading profits are exacted at the expense of others, while nothing useful is produced. And if the banks’ bets fail, there is always a taxpayer bailout ready and waiting. Capital gains should be taxed at the same rate; capital is not superior to labor and should not be treated so. But, since rich people rule the political system, and since they represent capital, they make the rules and have plenty of paid supplicants and professional shills who can be seen on TV making their arguments for them. I do love election season.
So what I am actually saying is that is IS unfair that working classes pay a higher effective tax rate, and that instead of imposing some kind of minimum tax on the rich, everyone should pay the same (lower) rate on all income AND capital gains. No more debates, no more us-versus-them, certain MSNBC left-wing commentators can shut the hell up and let some of the reddening of their faces fade, we can stop encouraging market traders’ and big banks’ economy-destroying wealth-skimming by taking away their preferential tax rates, and then maybe we can all get back to work.
What are the chances? The republican establishment is going to commit suicide and nominate Romney, the Supreme Court is going to strike down some elements of Obamacare, the left is going to be re-energized, and Obama is going to get reelected.
I don’t really care if the R establishment wants to commit suicide. Frankly, they are the problem, not the solution. But they’re going to take the rest of us with them.
