Jerry Nadler Makes Another Big Oopsie
Jerry Nadler made another big oopsie recently. No, he didn’t poop in his pants again. But his chubby digits may regret typing this tweet:
I guess Jerry forgot inheritance tax and corporate tax are forms of double taxation.
After all, if you pay all your income taxes throughout your life, and then pass on what’s left to your kith and kin, why is it getting taxed again? There’s nothing moral about inheritance tax.
And aren’t people who think that companies pay corporate tax the cutest little things? I just want to pat them on their heads and send them back to the sandbox.
Shareholders, customers, and employees suffer (the correct verb) corporate tax. “Companies” don’t pay anything. Ultimately, a real, live person suffers tax.
God, I loathe taxes in a way I’ll try to convey to you. Especially income tax.
You may be a latent commie if you like a tax or two:
Not to mention the rest of the bastard document!
When I renounced my US citizenship back in 2011, I had been living abroad for nearly 12 years. I had dutifully paid my US taxes even though I was barely in the country. You can’t renounce unless you do.
But interestingly, while I was living in England, I didn’t feel it as much. Sure, it was a pain in the ass to file. And hiring an accountant is expensive. (You can’t just run to H&R Block to get ex-pat taxes done.) But the extra taxes I owed on occasion were maybe the cost of a week’s holiday. It pissed me off, but it didn’t make me want to hand in my passport.
And then, the congressional geniuses passed FATCA.
The Damning Passage of FATCA
It was supposed to be called “FATCAT,” but they couldn’t come up with anything for the “T.”
Guess who was meant to bear the brunt of the FATCAT legislation?
Now guess who actually bore the brunt of it…
Let it be known: no legislation that targets “the rich” ever hits the rich. Because the rich are rich for a reason. And I’ll spell it out right now: Legal tax avoidance is an integral part of getting rich.
Notice I didn’t write “evading tax.” One, my publisher would rightly fire me on the spot. But more importantly, there are so many legal ways to avoid tax that evading tax suggests a high degree of stupidity.
I moved from England to Singapore in 2009. Singapore is a low-income tax jurisdiction. (But if you’re middle class, you can argue that your lack of tax is more than made up by the massive increase in consumption costs. After all, Singapore is an island half the size of London. It needs to import practically everything.)
I hired a great US accountant, with whom I’m still friends, and the amount of tax I had to pay to the US government increased enormously. I’d be lying if I said that didn’t have an impact on my renunciation decision.
That, and I was convinced the Hildebeast would take over for O’Bomber in 2016. Thank heavens I was wrong about that! In fact, the only time I’ve ever felt a pang of regret about my decision was when The Donald was elected.
But the unintended consequence of this idiotic FATCA legislation is that middle-class Americans started to renounce. They either couldn’t move back to America because Obamacare was too expensive or they wanted to stay abroad and couldn’t afford the cost of compliance.
The rich just stuck their wealth in tax wrappers like trusts and carried on as usual. Well, most of them.
Incidentally, I’m on the April 2012 naming and shaming “Quarterly Publication of Individuals, Who Have Chosen To Expatriate.” On the shitlist with me are Denise Eisenberg (Marc Rich’s ex-wife), Matt Ridley (author), Eduard Saverin (Facebook), and Derek Sivers (of CDBaby fame).
I keep good company, Rudes, and that includes you!
Taxes Are Crucial to the Big Picture
The reason I bring this up is that taxes are a critical part of macro analysis. How can you possibly look at the macroeconomy without looking at tax structure?
Inevitable disclaimer: I’m not a tax accountant, nor a tax attorney. So any and all I write about tax is for your education only. Never, ever do anything to your portfolio or wealth concerning tax without consulting your attorney and accountant. I can’t believe I have to write that.
But I do try to emulate the wonderful author Charles Adams, whose For Good and Evil: The Impact of Taxes on Civilization is required reading. Alvin Rabushka, in his foreword to the book, summarizes what Adams elucidates in his book. He shows:
- Good tax systems go bad unless citizens restrain the government.
- Civilization tends to destruct from bad taxation.
- Moderation is an important principle in the design and implementation of tax systems.
Moderation, in this case, includes the choice of tax rates, the penalties for evasion, the intrusiveness of tax collection, and the need to treat taxpayers equally by avoiding excess progressivity or regressivity.
It’s a fascinating read, and unfortunately, throws into sharp relief what’s going on in the developed world – especially the US, EU, and UK – today.
Because let’s face it, if you’re an MMTer, taxes don’t matter anymore. Well, unless you’re using them as some form of punishment.
And to paraphrase Groucho Marx, anyone who is an MMTer needs to get his head checked. But it’s a great question…
If You Can Print Your Way Out of Anything, What’s the Purpose of Tax?
Tax imputes value to a currency. That’s about it. (And that’s also dubious, btw.) But for countries that routinely collect taxes, you can see their currencies are more trusted (ironically also the US, EU, UK) than countries that can’t collect enough taxes (the Philippines, where I live, for example).
So… you’ve got to tax your people to give your currency value even though the tax you raise doesn’t come close to covering your costs?
My goodness, the intellectual Twister you have to play for that to make sense!
Really, taxes are now used to restrain, hinder, and otherwise punish producers to benefit parasites who happen to vote Left every chance they get.
Plus ca change, plus c’est la meme chose.
I’ll leave you with this. Try not to have nightmares.
Editor, Rude Awakening