Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
What would happen with economy if in some totally fictional scenario governments decide to tax super rich greatly?

Ahh, were that to happen many hopeful futures would open up, along with some nasty ones, depending on how it plays out. The power to tax is the power to destroy. Governments inherently have that power. That is why the wealthy have been happy to pay for the political campaigns. By so doing they have assured themselves of subservient governments. The question is one of how the bottom 95% of the population gain any measure of real influence on policy. At present they are confounded by systematic mis-education and propaganda and by political kabuki theater and distracted by a myriad of salacious to outrageous but mostly irrelevant issues.

A scenario for an exit from the grip of government by the nominees of the super-rich is conceivable, if improbable. In a parliamentary form of government it is possible that a party or a coalition with a sufficient majority could decide to simultaneously turn on the wealthy who have supported them. This would be more likely were the situation very dire and the general public significantly aware that that situation was due to following policies that served the interests of the super-rich.

Perhaps a lever towards such a revolt of the MPs would be the possibility of refusing another bailout for banks and finance. Were that to happen, the super-rich would be a whole lot less rich. A charismatic popular leader who was substantially bullet-proof could, under such circumstances, lead a government that changed its policies and began policies that provided the nation with renewable energy and transportation based on same. The policies could be re-oriented towards providing widespread rising wages and reducing income inequality. There is nothing inevitable about the course we are on. It is a choice that has been made by a few wealthy people who have been able to convince enough that they are right and have prevailed.

They have created a perceived reality highly favorable to their interests and >> majority of the population view the world through that perceptual filter. It is like an evil spell and it must be broken in order that any but a very few can have a decent life. There are significant constraints due to physical constraints, but they pale in comparison to the mental restraints under which we labor.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Aug 20th, 2011 at 05:33:32 PM EST
Paul Ferrell is a mainstream public analyst on economics and finance. I have seen him on PBS's business news programs, read his comments in panel discussions in Baron's and the article below is from MarketWatch, a WSJ blog:

Tax the super-rich, or revolution will overrun America next

Yes, tax the super-rich. Tax them now, before the other 99% rise up, trigger a new American Revolution, another meltdown, a new Great Depression. Historically, revolutions build over long periods, bubbles growing to critical mass. Then, "something happens." Suddenly. Unpredictably. A flashpoint triggers ignition. Nobody saw it coming in Egypt. A suicide in a remote village uploaded on a young Google executive's Facebook page. Goes viral, raging out of control. Cannot be stopped. So think hard about these six warnings blowing a new mega-bubble that will soon explode in our collective faces:

4. Warning: The super-rich are blinded by their addiction to money

In "Free Lunch: How the Wealthiest American Enrich Themselves at Government Expense (And Stick You with the Bill)," David Cay Johnston warns that the rich are like addicts, and to "the addicted, money is like cocaine, too much is never enough." Recent data: 300,000 Americans in "the top tenth of 1% of income had nearly as much income as all 150 million Americans who make up the economic lower half of our population."

5. Warning: Politicians are corrupted by this super-rich addiction to greed

In "Washington's Suicide Pact," Newsweek's Ezra Klein warns: "Congress is careening toward the worst of all worlds: massive job losses and an exploding deficit." And the debt-ceiling drama just made things a lot worse. Millions of jobs were lost during Bush years, his wars, tax cuts for the rich. Yet, today the GOP is in total denial of that legacy, blinded by an obsession to destroy Obama's presidency, no matter the consequences.

6. Warning: Soon the revolutionaries will rage, then dominate `Third World America'

Yes, we are ripe for a surprise revolution. In "Third World America" Arianna Huffington warns: "Washington rushed to the rescue of Wall Street but forgot about Main Street." Now Bernanke's promise of cheap money through 2013 is just one more "free lunch" to the richest 1%. Meanwhile, "one in five Americans unemployed or underemployed. One in nine families unable to make the minimum payment on their credit cards. One in eight mortgages in default or foreclosure. One in eight Americans on food stamps. Upward mobility has always been at the center of the American Dream ... that promise has been broken... The American Dream is becoming a nightmare."

Wake up folks. Super-rich addicts are destroying the American Dream for everyone. They're destroying the American economy. They don't care about you. Yes, they hear the ticking time bomb. They're stockpiling cash. Don't say you weren't warned. The IMF sees a new collapse sweeping across the planet. Open your eyes. You're not watching a film. This is not a metaphor. Plan now for the revolution, class warfare, market crash, economic collapse, plan for another depression.



"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Aug 20th, 2011 at 08:15:12 PM EST
[ Parent ]
They have created a perceived reality highly favourable to their interests and >> majority of the population view the world through that perceptual filter.

Yes for long as I know they are telling us that we shouldn't tax rich because they are those who will invest their wealth and make jobs for us and prosperity for the state. Also they kept telling us that we should borrow on the equity of our homes to by investment properties as their prices were raising like mad, put the tenant in and woala you'll have free money too just by watching time passing. People bought it. We all are going to be rich, hurray!
Now we know that there will not be free lunch for us / middle class, there is not enough lunches so they/super rich will have their meal.
So (no matter how fictional this scenario is) if government decide to tax them is it really that "sky will fall down" as they are saying? I do not see super rich investing in their countries in this era of globalisation and that's probably why we are not seeing more jobs in our respective countries...just opposite. Looks like they see us from developed world as consumers ONLY and how we are going to consume without jobs is not of their interest. They blame governments for unemployment. It's a circle.
I would like to know what would happen in this fictional situation where superrich are taxed so they can not invest in China/India/wherever. So governments with tax money should make more jobs (they are not that good in this)? Logic tells me that governments can only really invest that money in infrastructure and they will again give those works to corporations. Corporation (because they are capable of big projects) will pay us low wages again and keep the fat profits. For us people there is no win situation but at least we'll have infrastructure instead of cheap Asian stuff. My head is spinning...
How would this play in a short run? I am afraid financial system as we know it would collapse totally in this circumstances (this may be good in brother picture) but how this all will affect us little people? They keep scaring us with domino effect...and it is scary...

Science without religion is lame, religion without science is blind...Albert Einstein
by vbo on Sat Aug 20th, 2011 at 10:04:28 PM EST
[ Parent ]
Unless someone emerges with the stature of an FDR I fear that the only way out of our current situation will be by going through a collapse. But alternatives are available. The USA in WWII gave the lie to the myth that government cannot do anything right. Had the US Government not directed the economy to produce the necessary goods and services we could not have prevailed.

The myth that the rich should not be taxed so that they can invest their wealth in creating jobs died in the 1970s in the USA. But, through propaganda and the spell it has woven, most people think it is still true. And the government has within its power the ability to raise minimum wages and to require businesses to pay for medical care and retirement.

The USA and Australia, to name two countries, could be substantially self sufficient should they choose to direct their economies to that end, as could the European Union, could it just see itself as one multinational union working together for the common good instead of as many nationalities with some prospering at the expense of the others.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Aug 20th, 2011 at 11:48:22 PM EST
[ Parent ]
they are telling us that we shouldn't tax rich because they are those who will invest their wealth and make jobs for us and prosperity for the state ...

Nice little graph posted on BooTrib today (h/t to ejmw) exploding that bit of intellectual drivel:



She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon Aug 22nd, 2011 at 02:12:05 PM EST
[ Parent ]

Display:

Occasional Series