December 04, 2017 "Information
- I deplore the tax cut that has passed
Congress. It is not an economic policy tax cut,
and it has nothing whatsoever to do with
supply-side economics. The entire purpose is to
raise equity prices by providing equity owners
with more capital gains and dividends. In other
words, it is legislation that makes equity
owners richer, thus further polarizing society
into a vast arena of poverty and near-poverty
and the One Percent, or more precisely a
fraction of the One Percent wallowing in
billions of dollars. Unless our rulers can
continue to control the explanations, the tax
cut edges us closer to revolution resulting from
complete distrust of government.
current tax legislation drops the corporate tax
rate to 20%. This means that global corporations
registered in the US will be taxed at a lower
income tax rate than a licensed practical nurse
making $50,000 per year. The nurse, if single,
faces in 2017 a 25% marginal tax rate on all
income over $37,950.
single person is taxed at a rate of 33% on all
income above $191,651. 33% was the top tax rate
extracted from medieval serfs, and approaches
the tax rate on US 19th century slaves. Such an
upper middle class income as $191,651 sounds
extraordinary to most Americans, but it is so
far from the multi-million dollar annual incomes
of the rich as to be invisible. In America, it
is the shrinking middle and upper middle class
incomes that bear the burden of income taxation.
The rich with their capital gains from their
equity holdings are taxed at 15%.
single individuals who earn between $1 and
$9,325 are taxed at 10% on their pittance.
neoliberal economists who are the shills for the
rich, Wall Street, and the
Banks-Too-Big-Too-Fail claim, erroneously, that
by cutting the corporate income tax rate to 20%
all sorts of offshored profits will be brought
back to the US and lead to a booming economy and
higher wages. This is absolute total nonsense.
The money won’t come back, because it is
invested abroad where labor costs are lower, if
invested at all instead of buying back the
corporation’s stock or buying other existing
companies. After 20 years of offshoring US
manufacturing and professional tradable skills
and the incomes associated with the jobs, who is
going to invest in America? The American
population has no income with which to purchase
the goods and services from new investment, and
the American population’s credit cards are maxed
that is going to happen is that Wall Street will
calculate the lower tax rate into a higher
equity price. Wall Street can do this without
any of the offshored earnings coming home.
Suddenly, everyone who owns equities will
experience a boost in wealth, or the boost has
already occurred in anticipation of the handout.
deficit-conscious Republicans have put into the
Bill for Enhancement of the Rich’s Wealth, cuts
in social services in order to “save workers
from higher interest rates from budget
deficits.” This is more dishonesty. If the Fed
lets real interest rates rise to any meaningful
amount, derivatives will unwind, and the Fed
will have to create trillions more in new
dollars to keep its ponzi scheme in place. The
deficit that results from the tax cut will be
covered by the Fed purchasing the Treasuries,
not by a rise in interest rates.
are witnessing in the US and indeed throughout
the western world is the total failure of
capitalism. Capitalism is now merely a looting
machine. The financial sector no longer supplies
capital for production. What the financial
sector does is to turn discretionary consumer
income into interest and fee payments to banks.
Aggregate demand can only grow through debt
expansion, and the consumers reach a point where
they cannot expand their debt.
Capitalism, hiding behind “globalism,” which is
misrepresented as a good thing when it is death
itself, locates production where labor is
cheapest, thus depriving First World labor of
good wages and work opportunities and putting
First World countries on the path to becoming
Third World countries. Short-term profits and
executive and board bonuses and stock options
are maximized at the cost of the destruction of
the domestic consumer market.
Capitalism also privatizes as much of the public
sector, such as the military, as possible, thus
driving up the cost of the Pentagon’s budget.
Jobs that the soldiers themselves formerly did
are given to politically-connected firms. What
was once KP (kitchen patrol) is now provided by
an ouside private service. Private mercenaries
hired by the Pentagon collect as much in a month
as troops in the line of fire earn in a year. I
don’t know that the army any longer has a supply
organization other than the private business
that has the contract.
Medicare and Medicaid are the next to be
privatized, along with Social Security. The tax
cut will result in deficit and high interest
rate hype, and these lies will be used to save
the workers from high interest rates on their
mortgage, credit card, and student loan debt by
scaling back or privatizing Medicare, Medicaid,
and Social Security.
environment and public lands will be sacrificed
to the private profits of timber, mining, and
energy companies. Grizzley bears and wolves are
losing their protection under the endangered
species act so that states can sell trophy
hunting licenses to men who have to prove their
manhood by killing an animal with a
high-powerful rifle at a safe distance.
are witnessing is the complete looting of
America and the entirety of the West. While the
Western World collapses, the insouciant,
submissive people sit there sucking their thumbs
while they are being ruined.
is left of the West except looters at work.
tax bill is an abomination, an act of brutal
plunder. Its sponsers should be tarred and
feathered and ridden out of town on a rail, if
not hung from a lamp post.
Paul Craig Roberts was Assistant Secretary of
the Treasury for Economic Policy and associate
editor of the Wall Street Journal. He was
columnist for Business Week, Scripps Howard News
Service, and Creators Syndicate. He has had many
university appointments. His internet columns
have attracted a worldwide following. Roberts'
latest books are
The Failure of Laissez Faire
Capitalism and Economic Dissolution of the West,
How America Was Lost,
The Neoconservative Threat to
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