Sunday, May 4, 2014

An Obama Crony Offers Up a Plan to Kill the Stock Market

Steven Rattner, the crony who served as lead adviser to the Presidential Task Force on the Auto Industry, in 2009 for the Obama administration, is out in NYT with an absolutely insane idea. My highlight:
At a minimum, Congress should embrace the president’s recent proposal to both restrict the use of inversions and tax a merged company as an American company if it is managed in the United States and has substantial business here. That meritorious provision needs to be coupled with more aggressive action against other egregious practices, such as using tax havens to transfer vast amounts of profits out of Uncle Sam’s reach.

A more ambitious, and therefore more politically difficult idea, would be to scrap our unworkable corporate tax system altogether and instead tax shareholders, first by eliminating low tax rates on capital gains and dividends.

That would offset only a small portion of the loss of corporate tax revenue (a projected $350 billion in 2015), so we should raise the balance by eliminating loopholes enjoyed by wealthy Americans, increasing rates on their earned income and potentially introducing new concepts, such as taxing gains on investments as stock prices rise rather than when they are sold.
Got that? Rattner is calling for a tax on stock prices advances, even if you haven't taken a profit in a stock that is up in price. This means that if you don't have the cash on hand to pay a tax, you will be forced to sell a stock just to pay this new tax. Insane.

Also note the call for "eliminating loopholes." As I have pointed out many times, the call for a "fairer tax system," and the elimination of loopholes, is pure evil. Don't trust anyone that ever calls for a flat tax or a fairer tax, what should be advocated is the cutting of taxes, all taxes from current levels.


  1. The less people understand how the real world works, the more they want to control it.

    It's unfortunate, but as Americans become dumber and dumber, they naturally gravitate towards authoritarianism and institutionalized stupidity.

    Whatever has become of the America that is spoken of in adulatory terms in legends/fairy tales the world over?

  2. This is the same thing that death taxes do. A small business that provides a middle or upper middle class income can easily have millions of dollars of capital wrapped up in it. If the heirs can't come up with the cash to pay the taxes they are forced to sell or liquidate the business.

    Yes, I know there are ways around this, but that requires knowing about them and planning, but that doesn't change the aim of these taxes that force people to liquidate the assets. The available buyers are largely the very wealthiest.

    If one wants to own everything there are two ways to get there, direct force and indirect force. The public won't see selling to pay taxes to be the concentration of wealth that it is.

  3. -- Steven Rattner, the crony who served as lead adviser to the Presidential Task Force on the Auto Industry --

    Every time I read about one of these presidential "advisers" and the grandiloquent names of their jobs, I imagine I'm being immersed in an Ayn Rand-conceived world.

    -- such as taxing gains on investments as stock prices rise rather than when they are sold --

    On what time-frame? The very moment the prices go up (before they go down the next minute), or within a year, or a month, or an hour, or what? It is an insane idea, indeed. It would be a nightmare to implement, let alone to enforce, not to mention immoral.

  4. Tax loopholes, if they actually existed, would be a very good thing. Unfortunately, they are mostly a myth propagated by pro-government cultists. Rather than a tax gap that that these cultists talk about so much, there are actually numerous tax mounds whereby tax payers are required to pay taxes on income that does not really exist from an economic and sometimes even accounting point of view.

    A simple but obious example would be the fact that today's savers must pay tax on interest earned even though they are earning negative real interest rates. The tax code is full of such nonsense. This is quite apart from Mr. Wenzel's more fundamental point taxes are just to high in any case.

  5. But isn't the talk of cutting taxes also pure evil, as it evades a discussion on reducing spending? Cutting taxes collected directly by the Federal Government without reducing spending has the effect of increasing taxes collected through increasing the money supply.

    1. Well, it's stupid to cut taxes if you're still going to spend like crazy. The cowardly public (especially the old shits and their endless entitlements) need to get their heads out of their rear ends and be willing to make some sacrifices to MASSIVELY cut spending.