Saturday, April 10, 2021

On Refuting Robert Reich's "Seven Ways" of Taxation

Robert Reich

This email has arrived from Jeffrey G Moebus,  Master Sergeant, US Army [Retired] 

Dear Mr Wenzel: 

i was referred to You by Mr Scott Olmsted, who called You "a financial analyst, Austrian economist par excellence, radical anarcho-capitalist, and financial newsletter writer from whose advice I have made a lot of money."

 

Scott and i had been discussing strategic planning and Libertarianism as America transitions from Trumplandia to Bidenopia, and he linked me to Your "Tom Woods Rages Against the Libertarian Party" article on Target Liberty, and recommended that i check out the Economic Policy Journal, as well.

 

Upon doing the latter, i signed on to a 3-month subscription [to the EPJ Daily Alert]; and have already gotten my money's worth exploring all that it and Target Liberty have to offer.  Scott also referred me to three TL articles related to strategy: the ones on "choking the Woke," intellectual mine and mind fields, and mind and mine bombs.

 

You concluded "Woke" with:

 

I have obviously thought about this in detail but this is as far as I want to go right now, right here.

Email me (rw@epjmail.com) if you have any thoughts. I have a lot.

 

i have several thoughts on all that as well that I look forward to sharing with You.

 

Now, as to the specific purpose of this e-mail… .

 

Can You, could You, would You please write and publish a rebuttal to, and refutation and rebuke of Robert Reich's April 2 rant, "Tax the Rich. Here's How:  These 7 ways of taxing the rich would generate more than $6 trillion over 10 years" ? 

 

Mr Reich's argument is that "the tax code is rigged for the rich, enabling a handful of wealthy individuals to exert undue influence over our economy and democracy," and that:

 

"Conservatives fret about budget deficits. Well, then, to pay for what the nation needs—ending poverty, universal health care, infrastructure, reversing climate change, investing in communities, and so much more—the super-wealthy have to pay their fair share."  [Emphasis added.] 

 

Reich's Seven Ways To Tax The Rich, and his guesstimate as to how much money that would bring to DC are as follows: 

 

1.  Repeal the Trump tax cuts:  "...will raise an estimated $500 billion over a decade."

 

2.  Raise the tax rate on those at the top:  "...estimated $123 billion over 10 years."

 

3.  A wealth tax on the super-wealthy:  "...would raise $2.75 trillion over a decade, enough to pay for universal childcare and free public college with plenty left over."

 

4.  A transactions tax on trades of stock:  "...would raise $777 billion over a decade. That’s enough to provide housing vouchers to all homeless people in America more than 12 times over." [sic]

 

5.  End the “stepped-up cost basis” loophole:  "...would raise $105 billion over a decade."

 

6.  Close other loopholes for the super-rich:  "...estimated to raise $14 billion over a decade."

 

7.  Increase the IRS’s funding so it can audit rich taxpayers: "Collecting all unpaid federal income taxes from the richest 1 percent would generate at least $1.75 trillion over the decade."

 

And concludes:

 

"Together, these 7 ways of taxing the rich would generate more than $6 trillion over 10 years—enough to tackle the great needs of the nation. As inequality has exploded, our unjust tax system has allowed the richest Americans to cheat their way out of paying their fair share.

 

"It’s not radical to rein in this irresponsibility. It’s radical to let it continue."

 

i am in the process of preparing my own response to Mr Reich, starting with demonstrating that it is not a "rigged-for-the-rich tax code" that enables "a handful of wealthy individuals to exert undue influence over our economy and democracy."  That tax code is simply the natural, inevitable product of America's $ 1 = 1 Vote system of politics, and thus government and governance.  The tax code is a symptom; it is not the disease.

 

Next i will present him with data from the Tax Foundation that shows just exactly who is paying how much in individual income taxes, what their average tax rates were in 2018, and what percentage of total tax payments are made by the Top 1, 5, 10, 25, and 50 percentile cohorts of taxpayers, as compared to the Bottom 50%.

 

Then, i will specifically ask Mr Reich what he plans to do about and with the rich in order to take care of America's current $28.1 national, sovereign Debt  ~ which does not include this year's multi-trillion dollar stimulus, relief, and rebuild projects ~ when it starts coming due; particularly given the fact that the CBO projects that Debt to be close to $40 trillion [and twice projected GDP] in 2030.

 

And i will also inquire as to what happens to the rich when the wheels start falling off Social Security, Medicare, Medicaid, and Federal, State and Local government and private pension and retirement programs.  Set a Maximum Annual Wage, with anything beyond that automatically going to the IRS?

 

Next, i will ask him how many dollars he is prepared to CUT over the next decade from the budgets of America's military-industrial complex and surveillance-secrecy-security proto-Police State.  Or any other federal government program, for that matter.  And finally, i will ask him on what basis he assumes that the government would do a better job of managing the wealth of America's rich than they do, particularly when it comes to what they consume and, far more importantly, what they invest in and contribute to. 

 

At which point, i get out of my league and above my pay grade as far as addressing the flaws and incoherencies in each of Reich's proposed Seven Ways To Paradise.  And that's the reason for  sending You this Help Wanted and Needed request: 

 

Because i know that You could knock out many objections to each of his Ways, and show very clearly, concisely, and completely how and why they will not work,  And will most probably only serve to make matters worse; especially for the "non-rich" ~ whoever they actually end up being ~  the very people Reich claims to be trying to help.

 

And do that in a way that can be used as an effective weapon in The War Against The War On Wealth In The Name of Equality, Equity, and "Social Justice" ~ whatever those terms actually mean ~ that looms just down the road. 

 

Thank You for Your consideration, and have a Great weekend.

 

Sincerely,

 

Jeffrey G Moebus

Master Sergeant, US Army [Retired]

Sitka, Alaska

RW response:

It doesn't make sense to get into the weeds with people such as Reich. 

What needs to be pointed out is that all taxes suck money out of the private sector and put the money under the control of the government which is a central power.

When you have a central power, those close to the central power will benefit. It is not about providing what consumers desire. 

Because we have such a massive government, we have a massive crony system around government agencies (power centers). By increasing taxes, regardless of how it is done and who is taxed, it distorts the economy in favor of the crony elite---and increases the size of government even more. This, thus, results in a lowering of the standard of living for the general population.

The cronies benefit. This is why rather than more taxes, taxes need to be reduced across the board, along with the size of the goernment.

But it is doubtful Reich will ever support this. He has always been apparatchik serving the state.  He was in the administrations of Presidents Gerald Ford and Jimmy Carter, as well as being the United States Secretary of Labor from 1993 to 1997 under Bill Clinton. He was also a member of President Barack Obama's economic transition advisory board.

He is a servant of the crony state from head to toe.

7 comments:

  1. Why does MSG Moebus write with a lower case "i" but a capitalized "You"?

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    1. i think that started when i asked myself: Why does standard English capitalize "I" alone, but not "You," "He," "She," "It," "We," or "They"; and could come up with no valid, logical answer.

      Do You know why "I" is capitalized and "You" isn't? How and Why did that happen? What is it meant to indicate?

      Delete
  2. Reich says it all here:

    "Conservatives fret about budget deficits. Well, then, to pay for what the nation needs—ending poverty, universal health care, infrastructure, reversing climate change, investing in communities, and so much more—the super-wealthy have to pay their fair share."

    The Republicans have at times been deficit hawks when out of power and Reich is inviting them to become so again in order to finance Reich's agenda. So far their response is minimal, though there seems to be some pushback against more trillions in spending.

    The question in my mind is how roaring inflation will affect the players and the voters. Will Biden and company be seen as responsible for inflation and tossed out? Will Republicans get enough religion on deficits to cut back the state enough to prevent hyperinflation? Or will the demands to finance the $100+ trillion of unfunded liabilities guarantee descent into the neighborhood of Argentina and Venezuela?

    Years ago Gary North pointed out that the size of the unfunded deficits meant that it is an impossibility that all the promises made re Medicare, Social Security, and the rest can be fulfilled. Somebody eventually gets shorted. My own thought is that most will get shorted via inflation. As I think some congressman once said, "As long as we have a printing press, everyone will get every dollar coming to them". Reich would add his list of favored interests to "everyone" and add some heavy taxes to the money printing, hampering the economy and worsening the overall situation.

    I, like others, sense some desperation in the Dems efforts to pass their entire wish list quickly, as if they know their window is going to close at the next mid-term elections if not sooner. Reich is just part of that effort to move fast.

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    1. Hey Scott: WHEN [since the late 90s, the last time there was a federal budget surplus] have Republicans Ever been "deficit hawks"? They are the primary reason we haven't had a surplus in twenty years [since 9/11, to be exact].

      They get everything they want in return for giving the Democrats everything they want, and voila: a national, sovereign Debt of $28.16+++ trillion, and counting. You wrote:

      "The question in my mind is how roaring inflation will affect the players and the voters. Will Biden and company be seen as responsible for inflation and tossed out? Will Republicans get enough religion on deficits to cut back the state enough to prevent hyperinflation? Or will the demands to finance the $100+ trillion of unfunded liabilities guarantee descent into the neighborhood of Argentina and Venezuela?"

      The real question is: How SOON will roaring inflation shake the American people to their senses, and not just toss Biden and Company, but his and their whole Republican support troupe [including the Trumpatismo wing], as well? Will that happen before it degenerates into hyperinflation?

      And the politicians in DC have and will have little if anything to say about when and how hyperinflation will strike, and even less about what to do about it when it happens. That's all up to the boys and girls at The Fed and other global central bankers.

      And then the next question becomes: So what IS the alternative?

      Is a Weimar-style hyperinflation in the works? Well, that certainly set the stage for Hitler back then, and would very definitely set the stage for our very own Hitler this time. The COVID Lockdowns have also played their part in prepping the battlefield, as well. You concluded:

      "I, like others, sense some desperation in the Dems efforts to pass their entire wish list quickly, as if they know their window is going to close at the next mid-term elections if not sooner. Reich is just part of that effort to move fast."

      If hyperinflation happens, do You think there will even be mid-term elections in 2022?

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  3. The cronies benefit indeed. A lifetime spent as a court intellectual has made Robert Reich enormously wealthy.

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  4. "...a servant of the crony state." or "a court intellectual..." You are too kind. Robert Reich is an unrepentant THIEF.

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  5. Thank You, Mr Wenzel, for posting my request for assistance in rebutting, refuting, and rebuking Reich.

    That was sent to close to two dozen free market, Austro-Libertarian organizations, institutions, scholars, academics, intellectuals, pundits, and propagandists, and You are one of only three addressees who have responded to it.

    And, it was and is neither my desire nor my intent to "get into the weeds" with Reich or any of his ilk.

    Increasing taxes on "The Rich" [along with Corporations] and making them [and Corporations] pay their "Fair Share" is very clearly on the table in Swampland. And, there are a significant number of Americans who went along with those ideas even before the Lockdown Recession; and are no doubt even more inclined to do so today [https://www.forbes.com/sites/bowmanmarsico/2019/02/13/taxing-the-rich-what-the-polls-tell-us/?sh=33612c6d24d1]

    My intent and desire was and is to begin the process of taking those questions ~ about how much taxes The Rich [and Corporations] actually, really pay, and what that "Fair Share" really, actually is and should be ~ to the Citizens and Tax Payers of America, so that they can have access to the actual facts of the matter, and make up their minds about it based on reality instead of noise coming from the likes of Herr Reich.

    i cc:'d You a copy of my April 6 "An Open Letter to Robert Reich re Your 7 Ways to Tax The Rich," sent to Professor Reich at his contact e~address at the Goldman School of Public Policy at Berkeley, and look forward to any comments You may have on it. ~ jeff


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