Prelude: Just a Little About Oligarchs and Taxes
Almost without exception those among us with wealth in the millions or billions view working people with a compelling distrust. Most have never experienced a life of 8 hour work days, pay checks and family budgets. In fact, a good number have never even seen such a life in their own childhoods.
The dynastic fortunes oligarchs typically enjoy were inherited -- in many cases for more than a single generation. The fundamental world view of such people is one which considers the present era as an intermediary state occurring just before the dynasties become permanent, that is, a period of transition after which the American society will be firmly set as an oligarchy.
Always remember that the dream of
an American oligarch is to enjoy an uninterrupted opportunity of
making money in a fully functional United States while the rest of the population in subservient classes becomes:
1. a durable market population supporting a consumption economy, and,
2. a majority of tax payers financing the entire burden of operating the country.
Few of them directly employ the word "nobility," but, once their outlook is reduced from vocabulary to concept, this is exactly what they anticipate for their future status. Naturally, this presumption of their status leads them to an interesting idea of what their "fair and proper taxation" might look like.
It's Not a Tax Rate Problem
The first thought that might come to mind on the topic of raising taxes will inevitably have something to do with adjusting the "top marginal rate." That would be evidence of a stark -- although also a carefully, cleverly fabricated -- misperception. A higher "top marginal rate" would simply result in another collection of very sophisticated legislation exempting the highest wage earners -- individual plutocrats or multi-national corporations -- from any added tax liability, you know, a mere future version of what we have now.
The revenue problem is, indeed, a tax problem, but it is not a tax rate problem.
In fact, rather than being a structural element of the US tax code, these "high marginal rates" are no more than very convenient "deceptive wraiths," non-existent within the realm of the real, material world where MeanMesa visitors actually walk about, breathe, eat and so on.
An illuminating comparison can be made to Greece, one of the right wing propaganda's favorite nightmare movies. Greece, at the time of its economic collapse, had tax rates high enough to, more or less, theoretically finance its government. Greece's problem turned out to be precisely the same as the US problem: Greek tax payers with the highest incomes were simply able to legally -- or, perhaps, almost legally -- avoid paying taxes.
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| High Marginal Rates? [source] |
In fact, rather than being a structural element of the US tax code, these "high marginal rates" are no more than very convenient "deceptive wraiths," non-existent within the realm of the real, material world where MeanMesa visitors actually walk about, breathe, eat and so on.
Learning From the Greek Collapse
An illuminating comparison can be made to Greece, one of the right wing propaganda's favorite nightmare movies. Greece, at the time of its economic collapse, had tax rates high enough to, more or less, theoretically finance its government. Greece's problem turned out to be precisely the same as the US problem: Greek tax payers with the highest incomes were simply able to legally -- or, perhaps, almost legally -- avoid paying taxes.
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| US Tax "Dodgery" [source] |
Some of the Greek debt could possibly be attributed to these "national expenses" of theirs, but the collapse occurred at a much higher altitude. Greek plutocrats had long ago separated themselves from the costs of actually operating Greece, an expense discharged to the far less wealthy "man in the street."
When the nation's "bond holders," led into the invasion by the Germans, imposed the decision that Greece would be operated on even less revenue -- i.e. European Union style austerity -- the plutocrats were relieved with the prospect of continuing "business as usual" while the actual citizens of the country were to pay increased taxes for a constantly diminishing national government.
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| Scrooge McDuck Money Bin (image) |
Although this may have been irresistible candy for the right wing think tanks' propaganda machine in the US, it amounted to nothing less than an Orwellian "up is down, war is peace, bait and switch" opportunity for manipulating domestic public opinion. American oligarchs -- in no time -- seized on the chance to cynically portray Greece's plight as the exactly the potential impending "horror" awaiting us if we dared even consider requiring so much as a single penny of additional revenue from the bulging profits filling their tax protected, off shore, nearly invisible "Scrooge McDuck Money Bins."
The "Missing" Money and the "Missing" Tax Revenue
Forbes: $21-$31 Tn off shore
According to an early report on the study in The Guardian, Henry’s research shows that at least £13tn [$21 trillion] – perhaps up to £20tn [$31 trillion] – has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, “protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy“. According to Henry’s research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4tn [$6.2 trillion] in 2010, a sharp rise from £1.5tn five years earlier.
Investment in offshore tax havens remains at historically high
levels. They account for an ever increasing share of global FDI flows,
at about 6% and rising, UNCTAD reported. The subsidiaries play an even
larger role relative to FDI flows in a number of important investor
countries, acting as a channel for more than $600 billion of investment
flows in a money-in, money-out conveyor belt, often from the same
corporate entity using the island country to avoid taxation at home.
Over the past decade, economies that host these special purpose
vehicles have seen them gain in importance in terms of investment flows.
In addition, the number of countries offering favorable tax treatment
to foreign subsidiaries is on the increase, according to UNCTAD.
Tax avoidance and transparency in international financial
transactions are issues of global concern that require a multilateral
approach. To date, international efforts on these issues have focused
mostly on offshore financial centers, but corporate subsidiaries are a
far larger phenomenon.
Read this FORBES article here.
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| Hot spots for stashing Off Shore Cash (triblive article) |
More than half the world's money passes
almost undetected through a series of financial black holes that
shelter it from not only the tax collector but from shareholders,
partners and wives, a Tribune-Review investigation found. Once employed by gangsters such as Meyer
Lansky and Lucky Luciano, these secret bank accounts have grown so vast
and lawless that some experts tell the Trib they fear the amount of
money involved threatens societies from China to Africa, Europe and the
United States. World leaders railed against the impact of secret havens
during the G20 summit in Pittsburgh three years ago.
The information deprived American voters only see the "less of everything" side to this -- precisely the gaseous psychological outcome right wing billionaires have paid so dearly for their think tanks to construct. Should one of these voters actually be aware of the "off shore cash" issue, odds are good that any usable comprehension of the scope of the matter would still be missing.
The guess might be "a few billion."
The known facts suggest thousands of billions, yes, trillions. If the FORBES estimate is right, that number is $21-31 Tn. For the mathematically challenged, $21 Tn is:
An entire planet-wide economy lurks below the visible surface, and it is based on the immense amount of "hidden" or, at least, "fast moving" cash currently moving around, "doing business," while tucked away in places where tax collectors are stopped at the door and places where there are, thanks to the tax code, simply no doors at all.
The same folks who own the money own the tax collectors -- and the legislators writing the tax code they are dodging.
Meanwhile, the rest of us are trying to operate the world on a mere "skeleton" of a budget. Although current economic conditions have been very successfully "re-imaged" as dire, hopeless desolation, we are living in a world with more wealth than at any other time in history.
Unhappily, while we may be living amid such historical wealth, we are also living amid the largest historical number of craven billionaires and their complicit corporations. Even in these difficult economic times, their wealth not only continues to increase but increase at constantly faster rates.
The other central part of the banksters' propaganda [the first part was the nonsense about the unilaterally avoided "top marginal rate"] is relentlessly repeated meme that all this massive "slight of hand" is, in fact, completely legal.
Surprisingly, the banksters are actually telling the truth on this one -- at least as far as this little part goes. However, the story we get is that all this "cash hiding" is legal, son of a gun, thanks simply to an innocent "oversight" in the writing of the tax code. Somehow, the tax code "just wound up" with precisely the right provisions to protect the folks "making" all this "hard earned" money from paying taxes on most of it.
But, the really interesting part of this story has very little to do with the wreckage of the present tax code but a great deal to do with how that tax code was designed.
And, who, exactly, designed it that way.
And, who paid them to design it that way.
For years "sold out" Congressmen -- and Senators -- and Presidents -- have been very obediently, very patiently writing and passing one "addition" after another to the tax code every time the American billionaires ordered it. We may like to blame the old white men in the GOP for this mischief, but plenty of Democrats have turned a willing hand, too.
The MeanMesa Disclaimer
In keeping with this blog's world renown reputation for complete editorial "objective fairness," MeanMesa still attributes around 95% of these crooked "tax immunity" schemes authored into the tax code to the "owners" of the Grand Old Party.
While this post is about the hidden off shore trillions, we must very clearly realize that simply finding those trillions and adding them back into the nation's tax base is only part of the problem. Even if the Treasury Department's IRS had a track on every cent of those "hidden dollars" right at this moment, hardly anything would change noticeably.
Still, of course, it could be a great "first step."
However, we are already quite familiar with the capacity of all those trillions to very silently and invisibly slither from one foreign tax haven to the next in the middle of the night. So, yes, part of the solution is finding this money, but a much more challenging part of the solution requires having a tax code which is actually taxing it.
The tax code changes have to come first. Presuming that such a "tax code rewrite" can be accomplished without initiating a civil war between the billionaires and everyone else still represents a "heavy lift" for even MeanMesa's cheery optimism.
As for tracking the "missing money," a very interesting thing has surfaced in just the last few weeks.
Just as German Chancellor Angela Merkel was considering retaliating for having the NSA tap her personal phone calls, she "mentioned" withdrawing German cooperation in an international program called SWIFT.
Society for Worldwide Interbank Financial Telecommunication - SWIFT
Under the terms for national "membership" in SWIFT, the United States is able to access the trails of international monetary transfer of the types commonly used to finance international terrorists organizations. After successful tax code reform legislation both domestically and abroad, the "use" of SWIFT could be painlessly expanded to assist with our trillion dollar "tracking program."
None of this is possible at the moment thanks to the strict "terms of use" agreement this country had to sign to access the transfer files, but with the remainder of the financial markets on the planet still smarting from the drubbing George W. Bush and his cronies gave them in 2008, odds are good that there might be more cooperation out there than one might fist anticipate.
Just thinking.
It's important to know what you're asking for if you are still bothering to write letters to the Congress.
The guess might be "a few billion."
The known facts suggest thousands of billions, yes, trillions. If the FORBES estimate is right, that number is $21-31 Tn. For the mathematically challenged, $21 Tn is:
$21,000,000,000,000
For reference: US 2013 [estimated] GDP = $16.6 Tn -- $16,600,000,000
For reference: US 2013 [estimated July 2013] National Debt = $16.8 Tn
An entire planet-wide economy lurks below the visible surface, and it is based on the immense amount of "hidden" or, at least, "fast moving" cash currently moving around, "doing business," while tucked away in places where tax collectors are stopped at the door and places where there are, thanks to the tax code, simply no doors at all.
The same folks who own the money own the tax collectors -- and the legislators writing the tax code they are dodging.
Meanwhile, the rest of us are trying to operate the world on a mere "skeleton" of a budget. Although current economic conditions have been very successfully "re-imaged" as dire, hopeless desolation, we are living in a world with more wealth than at any other time in history.
Unhappily, while we may be living amid such historical wealth, we are also living amid the largest historical number of craven billionaires and their complicit corporations. Even in these difficult economic times, their wealth not only continues to increase but increase at constantly faster rates.
Probably Just an Oversight in the Tax Law
The other central part of the banksters' propaganda [the first part was the nonsense about the unilaterally avoided "top marginal rate"] is relentlessly repeated meme that all this massive "slight of hand" is, in fact, completely legal.
Surprisingly, the banksters are actually telling the truth on this one -- at least as far as this little part goes. However, the story we get is that all this "cash hiding" is legal, son of a gun, thanks simply to an innocent "oversight" in the writing of the tax code. Somehow, the tax code "just wound up" with precisely the right provisions to protect the folks "making" all this "hard earned" money from paying taxes on most of it.
But, the really interesting part of this story has very little to do with the wreckage of the present tax code but a great deal to do with how that tax code was designed.
And, who, exactly, designed it that way.
And, who paid them to design it that way.
For years "sold out" Congressmen -- and Senators -- and Presidents -- have been very obediently, very patiently writing and passing one "addition" after another to the tax code every time the American billionaires ordered it. We may like to blame the old white men in the GOP for this mischief, but plenty of Democrats have turned a willing hand, too.
The MeanMesa Disclaimer
In keeping with this blog's world renown reputation for complete editorial "objective fairness," MeanMesa still attributes around 95% of these crooked "tax immunity" schemes authored into the tax code to the "owners" of the Grand Old Party.
The MeanMesa Solution
Well, yes, there ARE a lot of moving parts.
While this post is about the hidden off shore trillions, we must very clearly realize that simply finding those trillions and adding them back into the nation's tax base is only part of the problem. Even if the Treasury Department's IRS had a track on every cent of those "hidden dollars" right at this moment, hardly anything would change noticeably.
Still, of course, it could be a great "first step."
However, we are already quite familiar with the capacity of all those trillions to very silently and invisibly slither from one foreign tax haven to the next in the middle of the night. So, yes, part of the solution is finding this money, but a much more challenging part of the solution requires having a tax code which is actually taxing it.
The tax code changes have to come first. Presuming that such a "tax code rewrite" can be accomplished without initiating a civil war between the billionaires and everyone else still represents a "heavy lift" for even MeanMesa's cheery optimism.
As for tracking the "missing money," a very interesting thing has surfaced in just the last few weeks.
Just as German Chancellor Angela Merkel was considering retaliating for having the NSA tap her personal phone calls, she "mentioned" withdrawing German cooperation in an international program called SWIFT.
Society for Worldwide Interbank Financial Telecommunication - SWIFT
Under the terms for national "membership" in SWIFT, the United States is able to access the trails of international monetary transfer of the types commonly used to finance international terrorists organizations. After successful tax code reform legislation both domestically and abroad, the "use" of SWIFT could be painlessly expanded to assist with our trillion dollar "tracking program."
None of this is possible at the moment thanks to the strict "terms of use" agreement this country had to sign to access the transfer files, but with the remainder of the financial markets on the planet still smarting from the drubbing George W. Bush and his cronies gave them in 2008, odds are good that there might be more cooperation out there than one might fist anticipate.
Just thinking.
It's important to know what you're asking for if you are still bothering to write letters to the Congress.
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