A conference committee has been merging the tax bills that were passed by the House of Representatives and the Senate, and even though we could still see some minor changes, it looks like the major parameters of the final bill have now been agreed upon. The final bill will be known as the Tax Cuts and Jobs Act, and we are being told that it will be one of the largest tax cuts in U.S. history. Unfortunately, the impact on our tax bills will be relatively minor, but at least it is a step in the right direction. The following summary of the major provisions in the final bill comes from AOL…
A less generous corporate rate cut: Republicans may cut the corporate rate to 21% from the current federal rate of 35%, instead of the 20% proposed in both the house and Senate bills. The new rate would start in 2018.
A lower top individual tax rate: The top individual bracket would drop to 37% instead of the 38.5% proposed in the Senate bill. It would still be down from the current 39.6%.
Keep the estate tax, but raise the threshold to qualify: Instead of phasing out the estate tax over time, like the House bill, the compromise bill would instead simply increase the threshold for an estate to qualify — from $5.6 million to around $11 million. That aligns with the Senate bill.
The reduction in the corporate tax rate is probably the most important provision in this tax overhaul package. For decades, the United States has had a much higher corporate tax rate than much of the rest of the world, and this has given large corporations an incentive to locate operations elsewhere. By making the corporate tax rate more competitive with everyone else around the globe, it is hoped that this will mean more good jobs for American workers.
This bill also reduces individual tax rates, but not by that much. So you will notice a reduction in your tax bill, but don’t expect anything “game changing” in nature.
In addition, this bill will eliminate the Obamacare individual mandate. This is something that should have been done back in January, and I am very happy that Congress is finally getting it done.
It is anticipated that both the House and the Senate will vote on the final version of this tax bill next week.
Sadly, it is not a slam dunk that this bill will actually get through the Senate.
Senator Bob Corker voted against the original Senate bill, and he may vote against this version too.
Ron Johnson of Wisconsin and Susan Collins of Maine have also expressed reservations about this bill, and it is unclear how they will vote at this point.
And let us not forget that Senator John McCain’s health is rapidly failing. Hopefully he would be present for any vote, but there is no guarantee that will happen.
In the end, Republicans can only lose two votes in the Senate, and so this is going to come down to the wire.
“Our tax cuts will break down — and they’ll break it down fast — all forms of government and all forms of government barriers and breathe new life into the American economy,” Trump said.
“They will unleash the American people, they will tear down the constraints on discovery, innovation and creation, and they will restore the hopes and dreams of the American family. Millions of middle class families will win under our plan.”
Of course even if this bill passes, our tax code will still be a complete and utter nightmare.
The tax code will still be over two million words, and the regulations will still be more than seven million words. Our system will still greatly favor those that can hire accountants and tax attorneys to find every conceivable loophole possible, and it will still be a tremendous burden on the middle class.
If I am elected to Congress, I am going to fight to completely abolish the IRS and the income tax. As I travel around Idaho and speak to groups, many are extremely receptive to these proposals, but they wonder how we would fund the government without an income tax.
Well, the truth is that the individual income tax only accounts for about 46 percent of all federal revenue, so we could definitely eliminate the individual income tax but we would also have to dramatically reduce the size of the federal government at the same time.
And we have a historical precedent for what this would look like.
Of course the Democrats are not just going to roll over and allow us to cut the size of the federal government in half, so in the short-term we can focus on some other solutions. A flat tax or a fair tax would both be far superior to the system that we have today, and there are some very good proposals already out there that just need to be implemented.
I once spent an entire year studying our tax code, and I still shudder when I think about those 12 months. Our tax code is a complete and utter abomination, and while I applaud Congress for trying to “simplify” it, the truth is that this bill that is about to be passed won’t make that much of a difference.
We need to fundamentally change the way that we fund government in this nation, and that is why I want to completely abolish the income tax. The system that we have right now is simply not fixable, and we should not pretend that any “tax reform bill” is going to solve our problems.
Are you ready for mass chaos in Washington? There are lobbyists for just about every cause that you can possibly imagine, and they are always working hard to influence members of Congress on their particular issues. But when you are talking about a major tax reform bill, that is something that virtually every single lobbyist in the entire city will want to be involved in. Our tax code is over two million words long, and the regulations are over seven million words long, and any changes to our immensely complex system could have absolutely enormous implications. There will be winners and there will be losers with any piece of legislation, and lobbyists will zealously fight to defend the turf belonging to their particular clients. Often lobbyists from different sides will literally be pitted directly against one another, and it won’t be pretty. In fact, one analyst that works for Cowen Washington Research Group says that we could soon be watching “the corporate hunger games”…
Almost every industry, special interest, and consumer group has an interest in the tax code, especially if the package ends up being as ambitious as Trump and Republican leaders want it to be. Chris Krueger, an analyst at Cowen Washington Research Group, told Business Insider that the battle over which loopholes to keep and which to throw out could get nasty.
“Welcome tribunes to the corporate hunger games!” Kruger said in an email. “Only one-sixth of lobbyists were involved with health care (give or take — assuming it is one-sixth of economy). Six-sixths of lobbyists are involved in taxes.”
There is so much at stake, and if the Republicans are able to get something passed it probably won’t look much like the plan that Trump originally proposed. But it is so important to do something, because today Americans spend more on taxes than they will on food, clothing, and housing combined. That is morally wrong, and we desperately need tax relief.
Trump’s tax plan would nearly double the standard deduction, and that would be a wonderful thing. It would provide instant tax relief to working class Americans, and that is something that I would greatly applaud.
Trump’s tax plan would also great reduce the tax rate for corporations. Our big corporations certainly don’t need the help, but we do want to get our rate more in line with the rest of the planet. Because our corporate tax rate is one of the highest in the world, it actually encourages companies to set up shop some place else. Being more competitive with the rest of the world would likely mean more jobs for the American people.
Trump’s tax plan would also reduce the number of tax brackets for individuals. Instead of seven, now there would just be three tax brackets of 12 percent, 25 percent and 35 percent. To me, those rates are way too high, but of course I would like to eliminate the individual income tax entirely.
Many are criticizing Trump’s plan for proposing to raise at least a trillion dollars over the next decade by getting rid of the deduction for state and local income taxes. For those that live in very high tax states such as California, that deduction is a really big deal…
High-income Californians, for instance, pay as much as 13.3 per cent of their income to the state in addition to their federal taxes. New Yorkers can pay up to 8.82 per cent.
Just seven U.S. states have no personal income taxes, including Texas, Florida and Nevada.
Hopefully the Republicans can pass some sort of tax reform in the short-term, because the status quo is definitely not acceptable.
When the income tax was first introduced in 1913, the vast majority of taxpayers were being taxed at a rate of just one percent. The following comes from Politifact…
The 1913 law imposed a tax of 1 percent on income up to $20,000, for both individual and joint filers. However, exemptions from the tax — the first $3,000 of income for individuals and the first $4,000 for joint filers — meant “virtually all middle-class Americans” were excused from paying, according to W. Elliot Brownlee’s book, Federal Taxation in America. The law also put in place a graduated surtax on incomes above $20,000; the highest rate paid, 7 percent, applied to Americans making more than $500,000 (about $11.4 million in 2011 dollars).
Today, Americans are being taxed into oblivion. It has been reported that we spend more than 6 billion hours a year on our taxes, and I once wrote an article detailing 97 different ways that various levels of government extract revenue from all of us.
Every year government just gets bigger and bigger on the federal, state and local levels. And the bigger government gets, the more oppressive it tends to become.
Personally, I would love to start starving the beast that the left has created, and a great way to do that would be to completely eliminate the federal income tax.
A lot of people could not even imagine a world without a federal income tax. But the truth is that our country once thrived under such a system. In fact, the greatest period of economic growth in U.S. history was between 1872 and 1913 when there was no income tax at all.
And we could do it again. Today, the individual income tax only accounts for about 46 percent of all federal revenue, and if we reduced the federal government to a size that our founders would have wanted, we would be more than okay.
But even if we can’t greatly reduce the size of the federal government in the short-term, we can at least go to a very basic flat tax or a fair tax, and both of those systems would be far superior to what we have today.
If we can’t get a flat tax or a fair tax right now, we should at least try to dramatically reduce tax rates and simplify the tax code as much as humanly possible.
But if we do get a short-term victory, the battle is definitely not over. In the long-term, we need to be very clear that our goal should be to abolish the income tax, the IRS and the Federal Reserve entirely. Anything short of that is not good enough.
The quote in the headline comes from Ron Paul, and it should be the goal of every conservative lawmaker in the entire country. When professional politicians tell you that they are in favor of reforming the tax code or reducing taxes a little bit, essentially what they are telling you is that they are perfectly fine with the status quo. They may want to tweak things slightly, but in general they are content with big taxes, big spending and big government. I spent an entire year getting a Master of Laws in Taxation at the University of Florida Law School, and in my opinion the best thing that Congress could do to the tax code would be to run it through a shredder and put it in a dumpster. As I noted the other day, the tax code is now more than four million words long and it takes Americans about six billion dollars a year to comply with it. Those that believe that they are offering the American people a “solution” by proposing to tinker with this abominable mess are just fooling themselves.
The only long-term solution that is going to work is to get rid of the entire steaming pile of garbage. Ron Paul understood this, and we would be very wise to take his advice. The following is the full version of the quote from the headline above…
“By the way, when I say cut taxes, I don’t mean fiddle with the code. I mean abolish the income tax and the IRS, and replace them with nothing.”
If I run for Congress, and I am very strongly leaning in that direction, this is what my position on taxes is going to be.
Of course we are going to have to dramatically change the composition of the House and the Senate in order to get this done, so in the short-term we may have to focus on reducing tax rates and the size of the tax code by as much as possible.
But ultimately, the goal will be to abolish the tax code and the IRS altogether.
We have become so accustomed to an income tax that many of us couldn’t possibly imagine a society without one. But today there are seven states that do not have one, and that includes very big states such as Texas and Florida. And from 1872 to 1913, there was no federal income tax. When a federal income tax was finally reinstituted in 1913, the rates were extremely low. The following comes from Politifact…
The 1913 law imposed a tax of 1 percent on income up to $20,000, for both individual and joint filers. However, exemptions from the tax — the first $3,000 of income for individuals and the first $4,000 for joint filers — meant “virtually all middle-class Americans” were excused from paying, according to W. Elliot Brownlee’s book, Federal Taxation in America. The law also put in place a graduated surtax on incomes above $20,000; the highest rate paid, 7 percent, applied to Americans making more than $500,000 (about $11.4 million in 2011 dollars).
So how did things go for our country during the four decades when there was no federal income tax?
Well, if you regularly follow my work you already know the answer to that question.
Oh, but we wouldn’t want to change from the way things work today, would we? After all, the U.S. economy has grown at a blistering average yearly rate of just 1.33 percent over the past decade, and we are actually behind that pace so far in 2017.
So how are we going to fund the federal government if we eliminate the income tax?
Well, the truth is that taxing individual incomes accounts for only 46.2 percent of all federal revenue. The federal government has lots of other ways that it raises money, but of course we wouldn’t be able to keep the massively bloated federal bureaucracy that we have today. We would need to reduce the size and scope of the federal government to an appropriate constitutional level, and of course most politicians on the left would resist this greatly.
There are some federal agencies and programs that we could completely eliminate altogether. If it was up to me, the EPA, the Department of Education and the BATFE would be good places to start. Any essential functions that they are currently performing could easily be absorbed by other agencies.
There are very few politicians in our entire country that will still talk like this, because our leaders have taken us so far down the road toward “a social state” that most Americans don’t even know what “limited government” looks like anymore.
Over the past several decades, the left has made a tremendous amount of progress toward achieving the goals that Saul Alinsky originally outlined in Rules for Radicals. Obamacare was a giant step toward federal control over our healthcare system, poverty is exploding as the middle class shrinks, we are nearly 20 trillion dollars in debt, our public schools have become left-wing indoctrination centers, and God has been pushed out of almost every corner of public life.
We should be very thankful that we got Donald Trump instead of Hillary Clinton, but many radical leftists consider Trump to simply be a bump in the road on the way to completely eradicating our way of life.
They want to criminalize what we believe by making it “hate speech”, they want to steal the minds of the next generation by dominating our system of education, and they want to use government institutions and the legal system as tools to completely reshape society in their image.
The only way that we are going to defeat this tyranny is if we stand up and fight for our country, and that is precisely what we are going to do.
After eight long, bitter years under Obama, will things go better for entrepreneurs and small businesses now that Donald Trump is in the White House? Once upon a time, America was the best place in the world for those that wanted to work for themselves. Our free market capitalist system created an environment in which entrepreneurs and small businesses greatly thrived, but today they are being absolutely eviscerated by the control freak bureaucrats that dominate our political system. Year after year, leftist politicians just keep piling on more rules, more regulations, more red tape and more taxes. As a result, the number of self-employed Americans is now lower than it was in 1990…
In April 1990, 8.7 million Americans were self-employed, but today only 8.4 million Americans are self-employed.
Of course our population has grown much, much larger since that time. In 1990, there were 249 million people living in the United States, but today there are 321 million people living in this country.
What this means is that the percentage of the population that is self-employed is way down.
In fact, one study found that the percentage of Americans that are self-employed fell by more than 20 percent between 1991 and 2010.
And if you go back even farther, the numbers are even more depressing. It may be hard to believe, but the percentage of “new entrepreneurs and business owners” declined by a staggering 53 percent between 1977 and 2010.
Sometimes I like to watch a television show called Shark Tank, and on that show they make it seem like entrepreneurship in America is thriving.
But the exact opposite is actually the case. In a previous article, I discussed how the number of new businesses being created in the United States has been steadily falling over the years. According to economist Tim Kane, the number of startup jobs per one thousand Americans has been declining for several consecutive presidential administrations…
Bush Sr.: 11.3
Bush Jr.: 10.8
So why is this happening?
As I mentioned at the top of this article, self-employed Americans are being absolutely strangled by oppressive rules, regulations and taxes.
To illustrate this point, I would like to share with you some quotes from an open letter that was authored by a small business owner named Don Chernoff…
#1I work for myself and have to pay my own medical expenses. Before the “affordable care act” I was paying about $200 per month for a high deductible policy. It was far from perfect but it got so much worse under the “Affordable” care act.
I now pay over $400 a month, my deductible went from $5,000 to over $6,000 and my out of pocket costs for care have skyrocketed.
#2I have to spend dozens of hours and thousands of dollars for a tax accountant each spring to prepare my taxes because I cannot possibly understand how to do it myself, and I have a master’s degree in engineering.
#3Many years ago when I quit a perfectly good job to start my own small business, I was shocked to learn that I had to pay both my share and what had been my employer’s share of Social Security.
#4Between state, federal and local taxes you’ve probably paid 50% or more of your income in taxes, but that’s not enough for politicians.
If you’ve been lucky enough to have created a business you can sell, now you’ll get to enjoy paying another tax on the capital gain from the sale.
This is another reason why we need a conservative revolution in Washington. We should demand that our members of Congress lower tax rates dramatically, completely eliminate the self-employment tax, greatly simplify the tax code and get rid of as many regulations on small business owners as possible.
What we are doing right now is not working. Small businesses have traditionally been one of the main engines of economic growth in this country, but thanks to the left they are unable to play that role at the moment.
It isn’t an accident that over the last ten years the U.S. economy has grown at exactly the same rate as it did during the 1930s.
If we want our economy to be great again, we need to go back and start doing the things that made it great in the first place. If we continue to suffocate our economy, we will continue to get the same results.
And with each passing day, we get more signs that the economy is heading into another major downturn. For instance, we just learned that Sears is closing 30 more stores on top of the 150 that had already been announced…
Sears Holdings, which wasn’t shy when it announced at the start of the year that it is closing 150 underperforming stores, has quietly added at least 30 more to the list.
Another 12 Sears stores and 18 Kmarts are among the locations that are closing, from Carson, Calif., to Hialeah, Fla., with most scheduled to shut their doors in July, based on calls to the stores, malls and confirmation in local media.
At the start of the year, the retailer pinpointed the 150 stores it said it would close. But it declined this week to provide a list of additional locations that are slated to shut since then, saying that it update store counts each quarter.
If you’re surprised by the collapse in new home sales in April, then you’re not paying attention.
The 11.4% MoM plunge in new home sales in April was 5 standard deviations below expectations and the biggest since March 2015.
Yes, the stock market is holding up for the moment, but for most Americans the “real economy” just continues to deteriorate. Just because we are at the end of a giant financial bubble does not mean that everything is going to be okay.
The numbers that I brought up in this article are just another example of our long-term economic decline. In a healthy economy, entrepreneurs and small businesses would be thriving. But instead, they are being systematically strangled out of existence by a political system that is wildly out of control.
At this time of the year, millions of Americans are rushing to file their taxes at the last minute, and we are once again reminded just how nightmarish our system of taxation has become. I studied tax law when I was in law school, and it is one of the most mind-numbing areas of study that you could possibly imagine. At this point, the U.S. tax code is somewhere around 4 million words long, which is more than four times longer than all of William Shakespeare’s works put together. And even if you could somehow read the entire tax code, it is constantly changing, and so those that prepare taxes for a living are constantly relearning the rules. It has been said that Americans spend more than 6 billion hours preparing their taxes each year, and Politifact has rated this claim as true. We have a system that is as ridiculous as it is absurd, and the truth is that we don’t even need it. In fact, the greatest period of economic growth in all of U.S. history was when there was no income tax at all. Why anyone would want to perpetuate this tortuous system is beyond me, and yet we keep sending politicians to Washington D.C. that just keep making this system even more complicated and even more burdensome.
If you hate taxes, you are far from alone. According to NBC News, here are some of the things that Americans would rather do than pay taxes…
Six percent would rather sell a kidney, eight percent would rather name their first-born “Taxes,” and 11 percent would rather spend three years cleaning the bathrooms at noro-torious Chipotle.
Of course our system was never intended to be like this anyway. Our founders hated taxes, and they fought a very bitter war to escape the yoke of oppressive taxation. During his very first inaugural address, Thomas Jefferson clearly expressed what he thought about taxes…
“A wise and frugal government… shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”
Why couldn’t we have listened to him?
When the federal income tax was originally introduced a little more than a century ago, most Americans were taxed at a rate of only 1 percent.
But of course once they get their feet in the door, the social planners always want more, and today we are being taxed into oblivion. Below, I would like to share with you three quick facts about our taxes that come from the Tax Foundation…
-This year, Tax Freedom Day falls on April 24, or 114 days into the year (excluding Leap Day).
-Americans will pay $3.3 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total bill of almost $5.0 trillion, or 31 percent of the nation’s income.
-Americans will collectively spend more on taxes in 2016 than they will on food, clothing, and housing combined.
That last statistic is a huge sore point with me.
How can anyone argue that we are not a socialist society when the government takes more of our money than we spend on food, clothing and housing combined?
What they are doing to us is deeply wrong and it is fundamentally un-American.
And of course the elite have the resources to be able to hire very expensive tax attorneys that help them manipulate the game in their favor. At the end of the day, many extremely wealthy Americans end up paying a much lower percentage of their income to the government than you or I do.
The Clintons and their family foundation have at least five shell companies registered to the address 1209 North Orange Street in Wilmington, Delaware — which is also home to some 280,000 other companies who use the location to take advantage of the state’s low taxes, limited disclosure requirements, and other business incentives.
Two of the five are tied to Bill and Hillary Clinton specifically. One, WJC, LLC, is used by the former president to collect his consulting fees. The other, ZFS Holdings, LLC, was used by the former secretary of state to process her $5.5 million book advance from Simon & Schuster. Three additional shell companies belong to the Clinton Foundation.
One could argue that they are simply “playing the game”, but why do we have to play such a complicated game in the first place?
Another thing that frustrates me is how our tax money is being wasted. Speaking of the Clintons, did you know that Bill Clinton still receives close to a million dollars from the federal government every year? Since he left office in 2001, he has been given approximately 16 million of our tax dollars.
Our system is deeply, deeply broken, but I am under no illusion that it will change any time soon. It will probably just continue to roll along until it eventually collapses under its own weight.
And of course it isn’t just income taxes that I am talking about. Our politicians have become masters at inventing ways to extract money from all of us. If you doubt this, just look at the list that I have shared below. It comes from my previous article entitled “A List Of 97 Taxes Americans Pay Every Year“, and it shows how the politicians are squeezing money out of us in just about every way that you can imagine…
#1 Air Transportation Taxes (just look at how much you were charged the last time you flew)
#2 Biodiesel Fuel Taxes
#3 Building Permit Taxes
#4 Business Registration Fees
#5 Capital Gains Taxes
#6 Cigarette Taxes
#7 Court Fines (indirect taxes)
#8 Disposal Fees
#9 Dog License Taxes
#10 Drivers License Fees (another form of taxation)
#11 Employer Health Insurance Mandate Tax
#12 Employer Medicare Taxes
#13 Employer Social Security Taxes
#14 Environmental Fees
#15 Estate Taxes
#16 Excise Taxes On Comprehensive Health Insurance Plans
#17 Federal Corporate Taxes
#18 Federal Income Taxes
#19 Federal Unemployment Taxes
#20 Fishing License Taxes
#21 Flush Taxes (yes, this actually exists in some areas)
#22 Food And Beverage License Fees
#23 Franchise Business Taxes
#24 Garbage Taxes
#25 Gasoline Taxes
#26 Gift Taxes
#27 Gun Ownership Permits
#28 Hazardous Material Disposal Fees
#29 Highway Access Fees
#30 Hotel Taxes (these are becoming quite large in some areas)
#31 Hunting License Taxes
#32 Import Taxes
#33 Individual Health Insurance Mandate Taxes
#34 Inheritance Taxes
#35 Insect Control Hazardous Materials Licenses
#36 Inspection Fees
#37 Insurance Premium Taxes
#38 Interstate User Diesel Fuel Taxes
#39 Inventory Taxes
#40 IRA Early Withdrawal Taxes
#41 IRS Interest Charges (tax on top of tax)
#42 IRS Penalties (tax on top of tax)
#43 Library Taxes
#44 License Plate Fees
#45 Liquor Taxes
#46 Local Corporate Taxes
#47 Local Income Taxes
#48 Local School Taxes
#49 Local Unemployment Taxes
#50 Luxury Taxes
#51 Marriage License Taxes
#52 Medicare Taxes
#53 Medicare Tax Surcharge On High Earning Americans Under Obamacare
#54 Obamacare Individual Mandate Excise Tax (if you don’t buy “qualifying” health insurance under Obamacare you will have to pay an additional tax)
#55 Obamacare Surtax On Investment Income (a new 3.8% surtax on investment income)
#56 Parking Meters
#57 Passport Fees
#58 Professional Licenses And Fees (another form of taxation)
#59 Property Taxes
#60 Real Estate Taxes
#61 Recreational Vehicle Taxes
#62 Registration Fees For New Businesses
#63 Toll Booth Taxes
#64 Sales Taxes
#65 Self-Employment Taxes
#66 Sewer & Water Taxes
#67 School Taxes
#68 Septic Permit Taxes
#69 Service Charge Taxes
#70 Social Security Taxes
#71 Special Assessments For Road Repairs Or Construction
#72 Sports Stadium Taxes
#73 State Corporate Taxes
#74 State Income Taxes
#75 State Park Entrance Fees
#76 State Unemployment Taxes (SUTA)
#77 Tanning Taxes (a new Obamacare tax on tanning services)
#78 Telephone 911 Service Taxes
#79 Telephone Federal Excise Taxes
#80 Telephone Federal Universal Service Fee Taxes
#81 Telephone Minimum Usage Surcharge Taxes
#82 Telephone State And Local Taxes
#83 Telephone Universal Access Taxes
#84 The Alternative Minimum Tax
#85 Tire Recycling Fees
#86 Tire Taxes
#87 Tolls (another form of taxation)
#88 Traffic Fines (indirect taxation)
#89 Use Taxes (Out of state purchases, etc.)
#90 Utility Taxes
#91 Vehicle Registration Taxes
#92 Waste Management Taxes
#93 Water Rights Fees
#94 Watercraft Registration & Licensing Fees
#95 Well Permit Fees
#96 Workers Compensation Taxes
#97 Zoning Permit Fees
So after reading all of this, are you still satisfied with how our present system operates?
Please feel free to share what you think by posting a comment below…
*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*
The percentage of Americans that are working for themselves has never been lower in the history of the United States. Once upon a time, the United States was a paradise for entrepreneurs and small businesses, but now the control freak bureaucrats that dominate our society have created a system that absolutely eviscerates them. This is very unfortunate, because by murdering small business, the bureaucrats are destroying the primary engine of job growth in this country. One of the big reasons why there are not enough jobs in America today is because small business creation is way down. As I mentioned yesterday, entrepreneurs and small businesses are being absolutely devastated by rules, regulations, red tape and by oppressive levels of taxation. If anyone doubts that small business in the United States is dying, just look at the charts below. Sadly, this is what the bureaucrats that run things want. They don’t want us to be independent of the system. Instead, they are much more comfortable when as many of us as possible are heavily dependent on the system in one way or another. If all of us have to go running to the government or to one of the big corporations for a job, then we are much easier to control. But as the control freaks continue to construct their bureaucratic utopia, they are also killing off what once made the U.S. economy so great.
The other day I came across the following two charts in an article by Charles Hugh Smith, and I was absolutely stunned by what I saw. This first chart shows that the number of unincorporated self-employed Americans has dropped back to levels that we have not seen since the mid-1980s even though our population has increased by tens of millions of people since that time…
As you can see, from 1970 to the mid-1990s the number of unincorporated self-employed Americans rose steadily. But in the mid-1990s it began to level off and now it is falling rapidly.
This next chart shows the percentage of self-employed Americans as a share of non-farm employment. In other words, those that work on farms are excluded from this chart. The percentage of self-employed Americans was fairly stable between 1970 and 1990, but since 1990 it has been steadily eroding and it has now reached a level never seen before…
At this point, only about 7 percent of non-farm workers are self-employed. That is depressingly low. That means that an overwhelming majority of those that are employed in America are working for the system in one capacity or another.
But isn’t that what we pound into the heads of our children these days? We teach them to work hard in school so that they can “get a good job” when they grow up. From a very early age we train our children to plug themselves into the system.
Not that working for someone else is wrong. Of course not. It is just that we are not fostering a spirit of entrepreneurship in America today. In fact, we seem to be doing everything that we can to kill it off.
In a previous article, I detailed how the number of new businesses (and the number of jobs those businesses create) has been steadily declining. In particular, this decline has accelerated dramatically under the Obama administration. According to an analysis of U.S. Department of Labor data performed by economist Tim Kane, the following is how the decline in the number of startup jobs per 1000 Americans breaks down by presidential administration…
Bush Sr.: 11.3
Bush Jr.: 10.8
Is that a good trend or a bad trend?
It doesn’t take an advanced degree in economics to figure out where things are going.
Kane speculated about why we are witnessing such a decline in his paper…
There is anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment. At the federal level, high taxes and higher uncertainty about taxes are undoubtedly inhibiting entrepreneurship, but to what degree is unknown. The dominant factor may be new regulations on labor. The passage of the Affordable Care Act is creating a sweeping alteration of the regulatory environment that directly changes how employers engage their workforces, and it will be some time until those changes are understood by employers or scholars. Separately, there has been a federal crackdown since 2009 by the Internal Revenue Service on U.S. employers that hire U.S. workers as independent contractors rather than employees, raising the question of mandatory benefits. New firms tend to use part-time and contract staffing rather than full-time employees during the startup stage. According to Labor Department data, the typical American today only takes home 70 percent of compensation as pay, while the rest is absorbed by the spiraling cost of benefits (e.g., health insurance). The dilemma for U.S. policy is that an American entrepreneur has zero tax or regulatory burden when hiring a consultant/contractor who resides abroad. But that same employer is subject to paperwork, taxation, and possible IRS harassment if employing U.S.-based contractors. Finally, there has been a steady barrier erected to entrepreneurs at the local policy level. Brink Lindsey points out in his book Human Capitalism that the rise of occupational licensing is destroying startup opportunities for poor and middle class Americans.
In my previous article, I also pointed out some of the other statistics that show that small business in America is dying…
-As a share of the population, the percentage of Americans that are self-employed fell by more than 20 percent between 1991 and 2010.
-As a share of the population, the percentage of “new entrepreneurs and business owners” dropped by a staggering 53 percent between 1977 and 2010.
Unfortunately, this is a crisis that has taken decades to develop and that there are not any easy solutions for. But there are certain factors that should be addressed immediately. The following are some of the things that are contributing to the murder of self-employment and small business in America…
#1 Taxes: The IRS seems to especially enjoy tormenting entrepreneurs and small businesses. In fact, things have gotten so bad that even late night talk show hosts are joking about it. Recently, NBC Tonight Show host Jay Leno joked that if Barack Obama really wanted to close down Guantanamo Bay, he should “do what he always does: declare it a small business and tax it out of existence”
#2 Ridiculous Regulations: If you have ever tried to start a small business, you probably know how frustrating it can be dealing with government red tape. In particular, the federal government has burdened our small businesses with gigantic mountains of rules and regulations and it gets worse with each passing day.
#5 The One World Trade Agenda: In many industries, U.S. small businesses simply cannot compete against products made by workers that are being paid slave labor wages on the other side of the globe.
#6 Predator Corporations: Time after time we have seen corporate giants extract huge tax breaks and other enormous concessions from local officials which give them an overwhelming advantage. But once the corporate giant moves into town, many of the existing small businesses find that they cannot compete and are forced to shut down.
#7 Our Corrupt Political System: On the national level, elections are almost always won by the politician that raises the most money. Our politicians know that their careers depend on raising money, so they tend to be very good to those that they get big money from. There is a reason why big corporations spend billions of dollars on campaign contributions and lobbying. They do it because it works. Over the decades, the big corporations have been able to shift the rules of the game massively in their favor, and this has been to the detriment of entrepreneurs and small businesses.
Can you think of any other factors that you would add to this list? Please feel free to share your opinion by leaving a comment below…
The mainstream media is not telling you this, but the truth is that most Americans are steadily getting poorer. The middle class is being absolutely eviscerated, and poverty is soaring to unprecedented heights. The fact that 90 percent of the population is constantly sliding downhill is not good for our society. The United States is supposed to be a land of opportunity with a vibrant free market system that enables average people to make better lives for themselves. Unfortunately, free enterprise is being strangled to death in the United States today. Entrepreneurs and small business are being pounded into oblivion by rules, regulations, red tape and oppressive levels of taxation. At the same time, millions of jobs have been shipped out of the United States by corporate giants and sent to countries where it is legal to pay slave labor wages. All of this has happened under both Democrats and Republicans. Meanwhile, wealth and power continue to become even more heavily concentrated in the hands of big government and big corporations. Our founding fathers warned that we should not allow such large concentrations of wealth and power, because they tend to funnel the rewards of society into the hands of a select few. We need to change the rules of the game so that entrepreneurs, small businesses and average workers can thrive in this country once again. If big government and big corporations continue to gobble up even more wealth and power, the wealth inequality that we see right now will only get even worse.
The following are 22 facts that prove that the bottom 90 percent of America is systematically getting poorer…
#1 According to the Pew Research Center, the top 7 percent of all U.S. households own 63 percent of all the wealth in the country.
#2 Between 2009 and 2011, the wealth of the bottom 93 percent of all Americans declined by 4 percent, while the wealth of the top 7 percent of all Americans increased by 28 percent.
#3 On average, households in the top 7 percent have 24 times as much wealth as households in the bottom 93 percent.
#5 According to the Economic Policy Institute, the wealthiest one percent of all American households have 288 times the amount of wealth that the average middle class American family does on average.
#6 According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.
#7 The six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.
#8 According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.
#9 In the United States today, corporate profits as a percentage of GDP are at an all-time high, but wages as a percentage of GDP are at an all-time low.
#10 In 1980, CEOs at S&P 500 companies made 42 times as much as their employees did on average. Today, CEOs at S&P 500 companies make 354 times as much as their employees do on average. In fact, there are many CEOs that make more than 1000 times what the average employees in their companies make.
#11 According to a report recently issued by the Pew Research Center, Americans over the age of 65 have 47 times as much wealth as Americans under the age of 35 on average.
#12 U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
#13 Back in 2007, about 28 percent of all working families were considered to be among “the working poor”. Today, that number is up to 32 percent even though our politicians tell us that the economy is supposedly recovering.
#15 Today, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
#16 The U.S. economy continues to trade good paying jobs for low paying jobs. 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
#22 At this point, the poorest 50 percent of all Americans collectively own just 2.5% of all the wealth in the United States.
Even if your income just stays the same, you are still getting poorer because inflation is a tax that is constantly chipping away at the value of every single dollar that you own. The cost of everything that we buy on a regular basis (food, gas, health insurance, etc.) is constantly going up, and if your income is not keeping pace that means that you are getting poorer.
So if most Americans are getting poorer, then why aren’t our politicians doing something to fix it?
Well, the sad truth of the matter is that the big corporations fund the campaigns of our corrupt politicians. They know that the candidate that raises the most money almost always wins, and so it provides an incentive for our politicians to be very good to those that have the money.
Plus, many of our politicians are way too busy having a good time to be bothered with doing anything for us. Take Barack Obama for example. According to The Telegraph, Barack Obama has spent twice as much time playing golf and vacationing as he has on attending economic meetings…
In contrast, he has only spent 474.4 hours in economic meetings.
“As a government watchdog group, we just tabulate the numbers and let others decide how to interpret them,” said Peter Schweizer, president of GAI, which compiled the report.
But this is a problem that is not going away. The bottom 90 percent of the country is systematically getting poorer, and if this continues it will inevitably result in massive social problems. The video posted below does a great job of graphically illustrating the crisis that we are facing…
The federal income tax is a bad joke and it needs to be abolished. All over the nation, hard working American families are being absolutely crushed by oppressive levels of taxation, and our politicians are constantly coming up with new ways to extract money from all of us every single year. Meanwhile, many ultra-wealthy Americans and many of the most profitable corporations in the country pay little to nothing in taxes. In fact, as you will see below, there are dozens of very prominent corporations that make billions of dollars in profits and yet don’t pay a dime in taxes. Tax avoidance has become a multi-billion dollar industry in the United States. Those that have the resources to “play the game” use shell companies, offshore tax havens and the thousands of loopholes in our tax code to minimize their tax burdens as much as possible. Meanwhile, the rest of us get absolutely hammered. This is fundamentally unfair. The federal income tax system is irreversibly broken at this point, and it is time to abolish it. If you think that the federal income tax system can be “fixed”, then you probably have never studied it. Our tax code is nearly 4 million words long and it is absolutely riddled with thousands of loopholes that favor big corporations and the ultra-wealthy. We should come up with a better, fairer way to fund the government. The United States once prospered greatly without a federal income tax, and it could do so again.
Many people simply do not believe that it is possible for corporations inside the United States to make billions of dollars in profits each year and not pay a dime in income taxes.
Well, according to a report put out by Public Campaign, that is exactly what is happening. Posted below are numbers that come directly from their report. 30 large corporations are listed, and 29 of them had a tax burden for 2008 through 2010 that was less than zero even though they all made enormous profits. And all 30 of them spent more on lobbying than they did on taxes.
The numbers that you are about to see are for 2008, 2009 and 2010 combined. For “taxes paid”, please note that for 29 of the corporations a negative number is given. That means that the net tax liability for 2008 through 2010 was actually less than zero.
After seeing these numbers, is there anyone out there that is still willing to claim that our tax system is “fair”?…
U.S. Profits: $10,460,000,000
Taxes Paid: ‐$4,737,000,000
U.S. Profits: $4,855,000,000
Taxes Paid: ‐$1,027,000,000
U.S. Profits: $32,518,000,000
Taxes Paid: ‐$951,000,000
U.S. Profits: $49,370,000,000
Taxes Paid: ‐$681,000,000
American Electric Power
U.S. Profits: $5,899,000,000
Taxes Paid: ‐$545,000,000
U.S. Profits: $882,000,000
Taxes Paid: ‐$508,000,000
U.S. Profits: $1,666,000,000
Taxes Paid: ‐$305,000,000
U.S. Profits: $1,931,000,000
Taxes Paid: ‐$284,000,000
U.S. Profits: $1,385,000,000
Taxes Paid: ‐$227,000,000
U.S. Profits: $5,475,000,000
Taxes Paid: ‐$216,000,000
U.S. Profits: $9,735,000,000
Taxes Paid: ‐$178,000,000
U.S. Profits: $6,403,000,000
Taxes Paid: ‐$139,000,000
U.S. Profits: $4,263,000,000
Taxes Paid: ‐$127,000,000
U.S. Profits: $365,000,000
Taxes Paid: ‐$112,000,000
Integrys Energy Group
U.S. Profits: $818,000,000
Taxes Paid: ‐$92,000,000
U.S. Profits: $1,725,000,000
Taxes Paid: ‐$85,000,000
U.S. Profits: $2,124,000,000
Taxes Paid: ‐$72,000,000
U.S. Profits: $926,000,000
Taxes Paid: ‐$66,000,000
U.S. Profits: $415,000,000
Taxes Paid: ‐$48,000,000
U.S. Profits: $627,000,000
Taxes Paid: ‐$46,000,000
U.S. Profits: $4,105,000,000
Taxes Paid: ‐$41,000,000
U.S. Profits: $4,903,000,000
Taxes Paid: ‐$34,000,000
U.S. Profits: $1,292,000,000
Taxes Paid: ‐$29,000,000
U.S. Profits: $286,000,000
Taxes Paid: ‐$26,000,000
U.S. Profits: $896,000,000
Taxes Paid: ‐$18,000,000
U.S. Profits: $2,551,000,000
Taxes Paid: ‐$17,000,000
U.S. Profits: $571,000,000
Taxes Paid: ‐$15,000,000
U.S. Profits: $1,020,000,000
Taxes Paid: ‐$9,000,000
U.S. Profits: $1,977,000,000
Taxes Paid: ‐$4,000,000
U.S. Profits: $4,247,000,000
Taxes Paid: $37,000,000 (a rate of less than 1%)
U.S. Profits: $163,691,000,000
Taxes Paid: ‐$10,602,000,000
Just look at that combined total again.
Those 30 companies had combined profits of more than 163 billion dollars during those three years, and yet the combined net tax liability of those companies was negative 10.6 billion dollars.
I wish I could make my taxes look like that.
Another company that is making headlines because of their taxes these days is Facebook.
It turns out that Facebook made more than a billion dollars in 2012 but did not pay a single dime in federal or state income taxes. The following is from a report that was just released by Citizens for Tax Justice…
Earlier this month, the Facebook Inc. released its first “10-K” annual financial report since going public last year. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012, Facebook did not pay even a dime in federal and state income taxes.
Instead, Facebook says it will receive net tax refunds totaling $429 million.
According to Businessweek, Facebook has an additional 2 billion dollars in tax credits that it will be able to use in future years…
Facebook says that it anticipates reducing its tax liability in the future by an additional $2.17 billion by using further net operating loss carry-forwards that it has banked.
Here are just a few examples of how the corporations and Wall Street banks these CEOs work for have significantly harmed our economy and the federal budget:
1. Bank of America CEO Brian Moynihan
Number of Offshore Tax Havens in 2010? 371.
In 2010, Bank of America operated 371 subsidiaries incorporated in offshore tax havens. 204 of these subsidiaries are incorporated in the Cayman Islands, which has a corporate tax rate of 0%.
Amount of federal income taxes Bank of America would have owed if offshore tax havens were eliminated? $2.5 billion.
Bank of America has stashed $18.5 billion in offshore tax havens to avoid paying U.S. income taxes. Bank of America would owe an estimated $2.5 billion in federal income taxes if its use of offshore tax avoidance was eliminated.
Amount of federal income taxes paid in 2010? Zero. $1.9 billion tax refund.
Bank of America received a $1.9 billion tax refund from the IRS in 2010, even though it made $4.4 billion in profits.
Taxpayer Bailout from the Federal Reserve and the Treasury Department? Over $1.3 trillion.
During the financial crisis, Bank of America received a total of more than $1.3 trillion in virtually zero interest loans from the Federal Reserve and a $45 billion bailout from the Treasury Department.
2. JP Morgan Chase CEO James Dimon
Number of Offshore Tax Havens in 2010? 83.
In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens.
Amount of federal income taxes JP Morgan Chase would have owed if offshore tax havens were eliminated? $4.9 billion
JP Morgan Chase has stashed $21.8 billion in offshore tax haven countries to avoid payng income taxes. If this practice was outlawed, it would have paid $4.9 billion in federal income taxes.
Taxpayer Bailout from the Federal Reserve and the Treasury Department? $416 billion
During the financial crisis, JP Morgan Chase received a total of more than $391 billion in virtually zero interest loans from the Federal Reserve and a $25 billion bailout from the Treasury Department, while Jamie DImon served as a director of the New York Federal Reserve.
3. Goldman Sachs CEO Lloyd Blankfein
Amount of federal income taxes paid in 2008? Zero. $278 million tax refund.
In 2008, Goldman Sachs received a $278 million refund from the IRS, even though it earned a profit of $2.3 billion that year.
Number of offshore tax havens in 2010? 39.
In 2010, Goldman Sachs operated 39 subsidiaries in offshore tax haven countries.
Amount of federal income taxes Goldman Sachs would have owed if offshore tax havens were eliminated? $3.32 billion.
Goldman Sachs has stashed $20.63 billion in offshore tax haven countries to avoid paying income taxes. If this practice was outlawed, it would have paid $3.32 billion in federal income taxes.
Taxpayer Bailout from the Federal Reserve and the Treasury Department? $824 billion.
During the financial crisis, Goldman Sachs received a total of $814 billion in virtually zero interest loans from the Federal Reserve and a $10 billion bailout from the Treasury Department.
Are you starting to get the picture?
The big banks and the big corporations make billions, but they pay nothing or next to nothing.
Over time, the percentage of the overall tax burden shouldered by corporations has gotten smaller and smaller.
Back in 1950, corporate taxes accounted for about 30 percent of all federal revenue. In 2012, corporate taxes accounted for less than 7 percent of all federal revenue.
These days, large corporations have become absolute masters at avoiding taxes. In fact, there are many international tax havens that are doing a booming business in setting up sham headquarters for U.S. corporations. For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.
But corporations are not the only ones doing this kind of thing.
The ultra-wealthy have also mastered the art of legally not paying taxes.
1 – The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.
2 – According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements. Imagine what our society would look like if all that time was spent on more economically profitable activities.
3 – 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.
4 – There have been 4,428 changes to the tax code over the last decade. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.
5 – According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.
6 – Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.
7 – In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.
8 – The IRS spends $2.45 for every $100 that it collects in taxes.
9 – According to The Tax Foundation, the average American has to work until April 17th just to pay federal, state, and local taxes. Back in 1900, “Tax Freedom Day” came on January 22nd.
10 – When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.
11 – Residents of New Jersey pay $1.64 in taxes for every $1.00 of federal spending that they get back.
13 – According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.
14 – Warren Buffett had an effective tax rate of just 17.4 percent for 2010.
15 – The top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.
16 – Sadly, as Bill Whittle has shown, you could take every single penny that every American earns above $250,000 and it would only fund about 38 percent of the federal budget.
Please share this article with as many people as you can. We have now entered a time of the year when tens of millions of Americans will be filling out their tax returns, and the pain of going through that process will make people even more receptive than normal to the truth about how broken our system is.
So what do you think?
Do you think that it is fair for the ultra-wealthy and hugely profitable corporations to get away with paying zero taxes while you get hammered?
Do you believe that it is time to abolish the income tax?
Please feel free to post a comment with your thoughts below…
An immensely powerful international organization that most people have never even heard of secretly controls the money supply of the entire globe. It is called the Bank for International Settlements, and it is the central bank of central banks. It is located in Basel, Switzerland, but it also has branches in Hong Kong and Mexico City. It is essentially an unelected, unaccountable central bank of the world that has complete immunity from taxation and from national laws. Even Wikipedia admits that “it is not accountable to any single national government.” The Bank for International Settlements was used to launder money for the Nazis during World War II, but these days the main purpose of the BIS is to guide and direct the centrally-planned global financial system. Today, 58 global central banks belong to the BIS, and it has far more power over how the U.S. economy (or any other economy for that matter) will perform over the course of the next year than any politician does. Every two months, the central bankers of the world gather in Basel for another “Global Economy Meeting”. During those meetings, decisions are made which affect every man, woman and child on the planet, and yet none of us have any say in what goes on. The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system. It is imperative that we get people educated about what this organization is and where it plans to take the global economy.
Sadly, only a very small percentage of people actually know what the Bank for International Settlements is, and even fewer people are aware of the Global Economy Meetings that take place in Basel on a bi-monthly basis.
Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.
The dinner discussions on money and economics are more than academic. At the table are the chiefs of the world’s biggest central banks, representing countries that annually produce more than $51 trillion of gross domestic product, three-quarters of the world’s economic output.
The article goes on to describe the room that these Global Economy Meetings are held in. It sounds like something out of a novel…
The Bank of England’s Mr. King leads the dinner discussions in a room decorated by the Swiss architectural firm Herzog & de Meuron, which designed the “Bird’s Nest” stadium for the Beijing Olympics. The men have designated seats at a round table in a dining area scented by white orchids and framed by white walls, a black ceiling and panoramic views.
The central bankers that gather for these meetings are not there just to socialize. No staff members are allowed into these meetings, and they are conducted in an atmosphere of absolute secrecy…
Serious matters follow appetizers, wine and small talk, according to people familiar with the dinners. Mr. King typically asks his colleagues to talk about the outlook in their respective countries. Others ask follow-up questions. The gatherings yield no transcripts or minutes. No staff is allowed.
So the fate of the world economy is determined by unelected central bankers in secret meetings that nobody ever hears about?
That certainly does not sound very “democratic”.
But this is the direction that “global governance” is taking us. The elite believe that the “big decisions” are far too important to be left “to the people”, and so most of the “international institutions” that have been established by the elite operate independently of the democratic process.
Sadly, the truth is that all of this has been planned for a very long time.
[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.
Back then, the Bank for International Settlements was only just starting to play a major role in global affairs. But over the years the BIS began to become increasingly important. The following is an excerpt from an article by Ellen Brown…
For many years the BIS kept a very low profile, operating behind the scenes in an abandoned hotel. It was here that decisions were reached to devalue or defend currencies, fix the price of gold, regulate offshore banking, and raise or lower short-term interest rates. In 1977, however, the BIS gave up its anonymity in exchange for more efficient headquarters. The new building has been described as “an eighteen story-high circular skyscraper that rises above the medieval city like some misplaced nuclear reactor.” It quickly became known as the “Tower of Basel.” Today the BIS has governmental immunity, pays no taxes, and has its own private police force. It is, as Mayer Rothschild envisioned, above the law.
Yes, it most definitely does bear a striking resemblance to the Tower of Babel as you can see from the photo in this article. Once again the global elite are trying to unite humanity under a single system, and that is most definitely not a good thing.
But many of these elitists are entirely convinced that “global governance” is what humanity desperately needs. They even publicly tell us what they plan to do, but most people are not listening.
For example, the following is an excerpt from a speech that former president of the European Central Bank Jean-Claude Trichet delivered to the Council On Foreign Relations in New York…
In the area of central bank cooperation, the main forum is the Global Economy Meeting (GEM), which gathers at the BIS headquarters in Basel. Over the past few years, this forum has included 31 governors as permanent members plus a number of other governors attending on a rotating basis. The GEM, in which all systemic emerging economies’ Central Bank governors are fully participating, has become the prime group for global governance among central banks.
The speech was entitled “Global Governance Today”, and you can find the full transcript right here. But most people have never even heard that such a thing as a “Global Economy Meeting” even exists because the mainstream media rarely discusses these sorts of things. They are too busy focusing on the latest celebrity scandal or the latest cat fights between the Republicans and the Democrats.
The mission of the Bank for International Settlements (BIS) is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.
In broad outline, the BIS pursues its mission by:
promoting discussion and facilitating collaboration among central banks;
supporting dialogue with other authorities that are responsible for promoting financial stability;
conducting research on policy issues confronting central banks and financial supervisory authorities;
acting as a prime counterparty for central banks in their financial transactions; and
serving as an agent or trustee in connection with international financial operations.
The head office is in Basel, Switzerland and there are two representative offices: in the Hong Kong Special Administrative Region of the People’s Republic of China and in Mexico City.
But when you start looking into the details, things get much more interesting.
So exactly how does the BIS achieve “monetary and financial stability”? An article posted on investorsinsight.com described how this is accomplished…
It accomplishes this through control of currencies. It currently holds 7% of the world’s available foreign exchange funds, whose unit of account was switched in March of 2003 from the Swiss gold franc to Special Drawing Rights (SDR), an artificial fiat “money” with a value based on a basket of currencies (44% U.S. dollar, 34% euro, 11% Japanese yen, 11% pound sterling).
The bank also controls a huge amount of gold, which it both stores and lends out, giving it great leverage over the metal’s price and the marketplace power that brings, since gold is still the only universal currency. BIS gold reserves were listed on its 2005 annual report (the most recent) as 712 tons. How that breaks down into member banks’ deposits and the BIS personal stash is unknown.
By controlling foreign exchange currency, plus gold, the BIS can go a long way toward determining the economic conditions in any given country. Remember that the next time Ben Bernanke or European Central Bank President Jean-Claude Trichet announces an interest rate hike. You can bet it didn’t happen without the concurrence of the BIS Board.
In recent years, it has become increasingly obvious who really has power over our economy.
When Barack Obama speaks, the markets usually move very little.
When Ben Bernanke speaks, the markets often respond with wild gyrations.
In all, 13 other central banks in the world have followed the Fed’s lead and set interest rates at or near zero in an effort to keep the liquidity spigots open and prop up their ailing economies. Those 14 economies represent a staggering $65 trillion in combined equity and bond market capitalizations, according to Bank of America Merrill Lynch.
Later on in that same article, the author discussed the enormous amounts of money that global central banks were creating out of thin air…
“When you add up all the central banks in the world, it’s going to be over $9 trillion,” said Marc Doss, regional chief investment officer for Wells Fargo Private Bank. “That’s like creating the second-largest economy in the world out of thin air.”
Indeed, central banking has become an economy unto itself, a multi-trillion-dollar empire that massages and manipulates markets, which respond to the slightest news out of the respective entities’ policy making committees.
So who controls the money?
The central banks of the world do.
And who controls those central banks?
The Bank for International Settlements does.
If we don’t like what the Bank for International Settlements is doing, can we do anything about it?
Maybe we’d feel better about the BIS if it were more transparent, but most everything about it, including its bi-monthly member and board meetings, is shrouded in secrecy. And perhaps more worrisome is that the BIS is free from oversight. By rights granted under its agreement with the Swiss Federal Council, all of the bank’s archives, documents and “any data media” are “inviolable at all times and in all places.” Furthermore, officers and employees of BIS “enjoy immunity from criminal and administrative jurisdiction, save to the extent that such immunity is formally waived . . . even after such persons have ceased to be Officials of the Bank.” Finally, no claims against BIS or its deposits may be enforced “without the prior agreement of the Bank.”
In other words they can do whatever they want, without consequences. How’s that for a leak-proof legal umbrella?
If the BIS wants to “intervene” in the financial markets, they simply just do it.
If the BIS wants to bail out big banks or even entire nations, they simply just do it.
The BIS reminds me of this old joke…
Q: Where does an 800 pound gorilla sit?
A: Anywhere it wants to.
So what is next for the Bank for International Settlements?
Well, many have speculated that eventually the goal is to have just a single global currency which will be administered by a single global central bank. The BIS is already using Special Drawing Rights (SDRs), which are considered to be a precursor to the coming global currency. The BIS played a big role in the adoption of the euro, and more currency integration is almost certainly on the way in future years…
But in the end, how you feel about the BIS may come down to how you feel about a one-world currency. The bank was a major player promoting the adoption of the euro as Europe’s common currency. There are rumors that its next project is persuading the U.S., Canada and Mexico to switch to a similar regional money, perhaps to be called the “amero,” and it’s logical to assume the bank’s ultimate goal is a single world currency. That would simplify transactions and really solidify the bank’s control of the planetary economy.
But if the United States ever did give up the U.S. dollar, it would be a massive blow to our national sovereignty.
When someone else controls your money, it doesn’t really matter that much who makes the laws.
Unfortunately, the global elite seem absolutely obsessed with the idea of a global currency, a one world economic system and a global government.
None of those things will happen this year, but that is where we are moving. With each new crisis that arises, the solutions that we will be given will always involve more centralization and more globalization.
So what do you think about all of this?
Please feel free to share your thoughts by leaving a comment below…
The way that we tax people in the United States is fundamentally broken and should be completely discarded. The U.S. tax code is absolutely riddled with loopholes that allow the super rich to legally avoid taxes while many of the rest of us are being taxed into oblivion. In our system of taxation, middle class families that work hard and try to play by the rules are deeply penalized while those that are willing to abuse the system make out like bandits. There is something fundamentally wrong with a system that enables wealthy politicians such as Barack Obama and Mitt Romney to pay a smaller percentage of their incomes in taxes than millions of middle class families. Mitt Romney has millions of dollars parked down in the Cayman Islands and in other tax havens. He does this to avoid taxes. Unfortunately, most Americans do not have the resources to funnel money through offshore tax havens. Most Americans just automatically have their paychecks shredded by taxes and then try to live on whatever is left over. Most Americans are just trying to survive financially from one month to the next. But the super rich have options. Thanks to technology, they can live almost anywhere they want and they can run their companies and manage their investments from anywhere in the world. The truth is that the wealthier you are the easier it is to avoid taxes. But even as the ultra-wealthy do their best to avoid taxes, many of them still feel free to demand that the rest of us be taxed more.
So what are some of the ways that the super rich avoid taxes?
Well, let’s start with those that are just “somewhat wealthy”. Many millionaires still want or need to be U.S. citizens, so they are subject to the U.S. tax code. Fortunately for them, their tax lawyers know of thousands of loopholes that have been designed to help the rich avoid taxes.
Some of the richest people in the country pay the least, relatively speaking, in taxes. How is this possible? Answer: Through the clever manipulation of the U.S. tax code’s loopholes. And it works: as income rises, effective tax rates rise as well, but only up to a point. IRS data shows that the effective income tax rate flattens out at just over 24 percent for those making over a million dollars. As income exceeds $1.5 million, the rate begins to decline; those with incomes above $10 million pay an average income tax rate of around 19 percent. So, how do they do it?
You could write an entire series of books on the technical details of how this gets done. Trust me, I studied tax law when I was in law school.
If you are interested in digging into some of the technical details of tax avoidance, a recent Businessweek article detailed 10 ways that the wealthy use our current tax code to avoid paying billions of dollars in taxes. It is an article worth reading if you have the time.
Sadly, tax avoidance by the wealthy is not just something that happens in the United States. The truth is that the exact same kind of thing happens in the UK as well.
There is not an easy fix to this problem. Our politicians have had decades to try to come up with a fair tax system and they have completely failed. The wealthy are always several steps ahead of them.
But federal taxes are not the only taxes that can be avoided. The vast difference in state tax rates creates another opportunity.
One advantage that wealthy Americans have is that they are far more mobile than most other Americans are. So if they don’t like the tax system in one state they can simply pick up and move to another state.
According to the Tax Foundation, 3.4 million Americans left New York state between 2000 and 2010.
Where are they escaping to? The Tax Foundation found that more than 600,000 New York residents moved to Florida over the decade – opting perhaps for the Sunshine State’s more lenient tax system – taking nearly $20 billion in adjusted growth income with them.
There is no state income tax in Florida. So moving from New York to Florida can end up saving you a bundle.
The same kind of migration is happening out west as well. According to that same CNS article, hundreds of thousands of people have been moving from California (a high tax state) to Texas (no state income tax)….
Between 2000 and 2010, the most recent data available, 551,914 people left California for Texas, taking $14.3 billion in income. Texas has no state income tax or estate tax.
A total of 48,877 people moved to Texas from California between 2009 and 2010 alone, totaling $1.2 billion in income. Another 28,088 from California relocated to Nevada and 30,663 to Arizona, a loss of $699.1 million and $707.8 million in income respectively.
Not that anyone really needs much of an excuse to move away from California. It is rapidly decaying right in front of our eyes.
But a lot of families do not have the same options that wealthy people do. Unfortunately, most average Americans are tied to their jobs and it would be much more difficult for them to pick up and move across the country. In this economy it can be economic suicide to give up a good job.
The reality is that most of us simply do not have the resources to play the same kinds of games that the wealthy play.
Sadly, even our most prominent politicians avoid taxes.
Just look at Massachusetts Senator John Kerry. He has avoided approximately $500,000 in taxes by docking his yacht in Rhode Island rather than in Massachusetts.
Yet Kerry sure does love to call for more taxes on the rest of us, doesn’t he?
Now let’s talk about the “super rich” and the “ultra-wealthy”. For many people that are worth billions of dollars, tax avoidance has become an art from.
Facebook co-founder Eduardo Saverin made national headlines recently when he gave up his U.S. citizenship, but the truth is that his case is small potatoes compared to the global elite and the shadow banking system that supports them.
According to the IMF, the global elite are holding a total of 18 trillion dollars in offshore banks.
That amount is more than the GDP of the United States for an entire year.
Well, the term originally developed because the banks on the Channel Islands were “offshore” from the United Kingdom. Most “offshore banks” are still located on islands today. The Cayman Islands, Bermuda, the Bahamas, and the Isle of Man are examples of this. Other “offshore banking centers” such as Monaco are actually not “offshore” at all, but the term applies to them anyway.
Traditionally, these offshore banking centers have been very attractive to both criminals and to the global elite because they would not tell anyone (including governments) about the money that anyone had parked there.
It has been reported that 80 percent of all international banking transactions involve offshore banks. A whopping 1.4 trillion dollars is being held in offshore banks in the Cayman Islands alone.
A lot of wealthy individuals never even visit these tax havens and yet reap the benefits anyway. The truth is that tax avoidance has become way too easy. The following example is from a recent Politico article….
A plausible scenario plays out like this: I hire an accountant. Doing her job, my accountant tells me that if I sign a few legal documents and route my money through a small Caribbean island, I could keep more of my paycheck and pay a lower tax rate. I may have earned my money in the United States, but legally I can claim that it was, in fact, earned in a tax haven.
Are you disgusted yet?
You should be.
But even though they avoid taxes like the plague, many of these elitists have the gall to call for higher taxes on all the rest of us.
For example, let’s review what the managing director of the IMF, Christine Lagarde, said in a recent interview….
“Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax.”
Even more than she thinks about all those now struggling to survive without jobs or public services? “I think of them equally. And I think they should also help themselves collectively.” How? “By all paying their tax. Yeah.”
It sounds as if she’s essentially saying to the Greeks and others in Europe, you’ve had a nice time and now it’s payback time.
“That’s right.” She nods calmly. “Yeah.”
And what about their children, who can’t conceivably be held responsible? “Well, hey, parents are responsible, right? So parents have to pay their tax.”
The IMF chief Christine Lagarde was accused of hypocrisy yesterday after it emerged that she pays no income tax – just days after blaming the Greeks for causing their financial peril by dodging their own bills.
The managing director of the International Monetary Fund is paid a salary of $467,940 (£298,675), automatically increased every year according to inflation. On top of that she receives an allowance of $83,760 – payable without “justification” – and additional expenses for entertainment, making her total package worth more than the amount received by US President Barack Obama according to reports last night.
Her “diplomatic status” allows her to escape all income taxes.
So perhaps she should pay her “fair share” before pointing the finger at anyone else.
But she is not the only one being hypocritical.
The super rich claim that they should pay lower taxes on investment income for the good of our “capitalist system”, but when their banks are about to go under they are more than happy to have those losses be socialized.
As I wrote about yesterday, the stage is already set for another massive round of bailouts when the next great financial crisis strikes. Once again our taxes will pay for the mistakes of the ultra-wealthy.
The truth is that our system is fundamentally broken.
We need to abolish the income tax and shut down the IRS.
Those two steps alone would do wonders for our economic system.