Indebted governments may soon consider a big one-time levy on capital assets. Between ObamaCare, Iran and last quarter’s uptick in U.S. economic growth, taxpayers these days may be distracted from several dangers to come. But households from the United States to Europe and Japan may soon face fiscal shocks worse than any market crash. The White House and New York Mayor-elect Bill de Blasio aren’t the only ones calling for higher taxes (especially on the wealthy), as voices from the International Monetary Fund to billionaire investor Bill Gross increasingly make the case too. In his November investment commentary for bond giant Pimco, Mr. Gross asks the “Scrooge McDucks of the world” to accept higher personal income taxes and to stop expecting capital to be taxed at lower rates than labor. In October the IMF floated a bold idea that didn’t get the attention it deserved: lowering sovereign debt levels through a one-off tax on private wealth. – Wall Street Journal
Dominant Social Theme: More tax revenue is needed to make governments around the world work.
Free-Market Analysis: Say what? This WSJ article warns us that most major governments around the world are contemplating significant tax hikes.
There are three major conclusions that we would draw from this. First, those globalists who want homogenized, high-tax societies have no intention of lowering the pressure on increasingly harassed people around the world. Second, this is a coordinated attack. Third, those launching it don’t seem to care how transparent it is. They will continue.
There is a fourth conclusion as well, which is that no matter how much tax revenues governments get, that revenue will be basically wasted – and then still more revenue will be needed. If governments were allowed to do so, the amount of revenue a given government could waste would surely approach 100 percent of a given nation’s revenues.
Here’s more from the WSJ article:
Between 2008 and 2012, several of the developed world’s most fiscally challenged nations (including the United Kingdom, Ireland and Spain) increased top personal income tax rates by an average of 8%. In the United States, the expiration of the Bush tax cuts pushed the highest federal income tax bracket to 39.6% from 35%.
What the IMF calls “revenue-maximizing top income tax rates” may be a good indication of how much further those rates could rise: As the IMF calculates, the average revenue-maximizing rate for the main Organization of Economic Cooperation and Development countries is around 60%, way above existing levels.
For the U.S., it is 56% to 71% – far more than the current 45% paid in federal, state and local taxes by those in the top tax bracket. The IMF singles out the U.S. as the country where raising top rates toward 70% (where they were before the Reagan tax cuts) would yield the most revenue – around 1.25% of GDP.
And with a chilling candor, the IMF admits that its revenue-maximizing approach takes no account of the well-being of top earners (or their businesses). Taxes can rise in ways both prominent and subtle. In the United Kingdom, the highly advantageous “resident non-domiciled” status – requiring wealthy residents to pay taxes on overseas earnings only if they “remit” the money to the U.K. – has become much harder to qualify for and more costly after recent reforms.
In France, President François Hollande finally managed to pass a 75% tax on income above one million euros and now he is seeking to limit the tax benefits of “life insurance contracts,” a long-term savings instrument used by most wealthy households. As for the uniquely French “impôt sur la fortune,” taxing those with net worth above 1.3 million euros, it is alive and well.
Japan too is taking steps to increase personal taxation, though it hasn’t yet targeted top earners in particular. Of course these measures won’t return the world’s top economies to sustainable levels of debt. That could be achieved only through significant economic growth (the good way) or, as the IMF puts it, “by repudiating public debt or inflating it away” (the bad way).
From New York to London, Paris and beyond, powerful economic players are deciding that with an ever-deteriorating global fiscal outlook, conventional levels and methods of taxation will no longer suffice. That makes weapons of mass wealth destruction – such as the IMF’s one-off capital levy, Cyprus’s bank deposit confiscation, or outright sovereign defaults – likelier by the day.
The most telling statement above is this one: “And with a chilling candor, the IMF admits that its revenue-maximizing approach takes no account of the well-being of top earners (or their businesses).”
In fact, what is contemplated is not an approach but an attack. It is evidently and obviously one being coordinated from the top. Those internationalists that run the current system want to raise taxes and have no concern for “top earners.”
That’s because taxes are not really about raising revenues. The expansion of taxes around the world is all about destruction. Destruction of civil resources. Destruction of culture. Destruction, even, of society itself.
This is what we have been predicting – and discussing – regularly. Our current crop of globalists, alarmed by what we call the Internet Reformation, has surely expanded their attacks.
Is the world being forcibly evened out prior to the implementation of an increasingly internationalist monetary regime? War stalks the world. China and Japan are facing off. The Middle East has been undermined by the US State Department and the CIA.
The “youth revolutions” that have undermined various secular governments in the Middle East have led to them being replaced by Islamic governments. The idea apparently is to create a faux face-off between “Islam” and the “West.”
At the same time as the West faces economic decline and rising international tensions, those apparently orchestrating this massive tapestry of globalism will continue to find ways to weaken and degrade living standards around the world.
In France, there has been a great deal of pushback to additional – punitive – taxation. But that was merely the opening shot in a war against the upper classes that will soon take aim at the real target: Western middle classes.
The real aim of those orchestrating a global “evening out” is to ensure that there is no one social or economic group that can stand against what they have in mind.
But in the era of central banking, taxes are increasingly unnecessary. Their aggressive expansion is thus something of a dominant social theme. There is almost nothing taxes provide that cannot be done better at less cost by the private sector.
And as we pointed out above, as there is no way to control government spending, governments can and will spend all the revenue they receive, up to and including the entire gross national product.
The war has apparently commenced in earnest. Increasingly confiscatory strategies are now to be set in place and coordinated around the world. Buy precious metals, farmland and food. Keep your wealth close to you and pay as little to the government as you legally can.