The New York Times discovers the obvious:
“For the Wealthiest, a Private Tax System That Saves Them Billions: The very richest are able to quietly shape tax policy that will allow them to shield billions in income.”
Incoming tax policies will save the “very richest” billion more in taxes. But they have already saved hundreds of billions in taxes, if not trillions. In the USA alone. And we have to thank, in particular, the great so-called democratic leaders for that (some of the most prominent ones, like the adored Nancy Pelosi, hero of Obamacare, made hundreds of millions of dollars, while in politics: a successful political career is the safest way to make a fortune.
Bill: “Hey, Donald, We Gave You Everything, It’s Our Turn To Lead the Low Lives Again!” Donald: “You Mean the Idiots?” Hillary: “Oh Donald, Don’t Speak Like That!” [Then She Hilariously Bleats Like A Goat.] Donald, Less Amused: “Can You Believe These People? They Are So Greeeedy!”
So it is all over the so-called democratic West. The situation in France does not differ from that in the USA, it is actually in some ways, much worse
. Two-thirds of France’s largest companies (CAC 40) by market capitalization are held by families (the equivalent consideration with the USA’s 500 largest market cap companies shows “only” 20% owned and controlled by families).
How is this all possible? Both the French and U.S. tax codes exclude the wealthiest from much, if not all, taxation. The French tax code does it glaringly (but the ). The tax code of the USA does it both glaringly, and obscurely.
In either case, the plutocratically owned Main Stream Media (MSM) never reports it . Or then they report it the way the New York Times did: by omitting a lot, if not most.
But let the New York Times’ Patricia Cohen and Noam Scheiber tell it their way:
“WASHINGTON — The hedge fund magnates Daniel S. Loeb, Louis Moore Bacon and Steven A. Cohen have much in common. They have managed billions of dollars in capital, earning vast fortunes. They have invested large sums in art — and millions more in political candidates.
Moreover, each has exploited an esoteric tax loophole that saved them millions in taxes. The trick? Route the money to Bermuda and back.
With inequality at its highest levels in nearly a century and public debate rising over whether the government should respond to it through higher taxes on the wealthy, the very richest Americans have financed a sophisticated and astonishingly effective apparatus for shielding their fortunes. Some call it the “income defense industry,” consisting of a high-priced phalanx of lawyers, estate planners, lobbyists and anti-tax activists who exploit and defend a dizzying array of tax maneuvers, virtually none of them available to taxpayers of more modest means
In recent years, this apparatus has become one of the most powerful avenues of influence for wealthy Americans of all political stripes, including Mr. Loeb and Mr. Cohen, who give heavily to Republicans, and the liberal billionaire George Soros, who has called for higher levies on the rich while at the same time using tax loopholes to bolster his own fortune.”
Something the New York Times does not mention at all: it is talking here only about the money wealth, and income that one can see. However, MOST OF THE WORLD’S WEALTH IS HIDDEN IN DARK POOLS.
And there is worse: money is power. Money gives power. The interest of money is that it enable the owner to have others do what she or he, wants.
But Bill and Melinda Gates don’t need to spend any money to have Obama giving them the power of molding the educational system as they see fit: they just show up, and make suggestions. Obama and his court immediately give Bill and Melinda the reins, because they want a job in 13 months, when they dismal tenure expires.
And so it is all over: when Bill and Melinda take the reins of tens of countries health care systems, and, still hiding behind their “love of man” decide that healthy policies will favor Monsanto (with which their “charities” and investments are entangled), and its wonderful Genetically Engineered wellness. But back to the New York Times’ more prosaic considerations:
“All are among a small group providing much of the early cash for the 2016 presidential campaign.
Operating largely out of public view — in tax court, through arcane legislative provisions and in private negotiations with the Internal Revenue Service — the wealthy have used their influence to steadily whittle away at the government’s ability to tax them. The effect has been to create a kind of private tax system, catering to only several thousand Americans.
The impact on their own fortunes has been stark. Two decades ago, when Bill Clinton was elected president, the 400 highest-earning taxpayers in America paid nearly 27 percent of their income in federal taxes, according to I.R.S. data. By 2012, when President Obama was re-elected, that figure had fallen to less than 17 percent, which is just slightly more than the typical family making $100,000 annually, when payroll taxes are included for both groups.
The Greatest Drop Of Tax Rate For the Wealthiest Was Under Bill Clinton
The ultra-wealthy “literally pay millions of dollars for these services,” said Jeffrey A. Winters, a political scientist at Northwestern University who studies economic elites, “and save in the tens or hundreds of millions in taxes.””
A year. For each concerned.
A characteristic of the truly wealthy is that they give to politicians of all stripes. Left unsaid, in their “negotiations” with the IRS, is that tax inspectors know that, be they good boys and girls, they may end up with way more cushy jobs. Actually, the negotiators they speak to often happened to have climbed that ladder. The new York Times still believe, though, that plutocrats have political inclinations aside from their true calling, hell itself:
“Some of the biggest current tax battles are being waged by some of the most generous supporters of 2016 candidates. They include the families of the hedge fund investors Robert Mercer, who gives to Republicans, and James Simons, who gives to Democrats; as well as the options trader Jeffrey Yass, a libertarian-leaning donor to Republicans.
Mr. Yass’s firm is litigating what the agency deemed to be tens of millions of dollars in underpaid taxes. Renaissance Technologies, the hedge fund Mr. Simons founded and which Mr. Mercer helps run, is currently under review by the I.R.S. over a loophole that saved their fund an estimated $6.8 billion in taxes over roughly a decade, according to a Senate investigation. Some of these same families have also contributed hundreds of thousands of dollars to conservative groups that have attacked virtually any effort to raises taxes on the wealthy.”
The Wealthiest Have Captured Tax Legislation To Make Themselves Untaxable
The google guys, when outside of their personal jumbo jets once fueled by the government (at NASA’s Moffet Field, personal observation), like many other Silicon types, claim to be “progressives”, “liberal”, etc. But actually they finance the far right too. Just they do it secretively. PPP Notice Tax Rates Of the Wealthiest 400 Taxpayers Went Down Dramatically Under “Democrat” Clinton. Also Notice Dip Under Obama.
Of course the topmost wealthy don’t even pay tax, while they contemplate stolen, world famous art in their redoubts. Under Obama, there was a tiny crack-down on the expansion of the wealth of the wealthiest:
“In the heat of the presidential race, the influence of wealthy donors is being tested. At stake is the Obama administration’s 2013 tax increase on high earners — the first substantial increase in two decades — and an I.R.S. initiative to ensure that, in effect, the higher rates stick by cracking down on tax avoidance by the wealthy.
While Democrats like Bernie Sanders and Hillary Clinton have pledged to raise taxes on these voters, virtually every Republican has advanced policies that would vastly reduce their tax bills, sometimes to as little as 10 percent of their income… “There’s this notion that the wealthy use their money to buy politicians; more accurately, it’s that they can buy policy, and specifically, tax policy,” said Jared Bernstein, a senior fellow at the left-leaning Center on Budget and Policy Priorities who served as chief economic adviser to Vice President Joseph R. Biden Jr. “That’s why these egregious loopholes exist, and why it’s so hard to close them.”
Not really. The truth is that most people don’t care, because all they obsess about sport scores, same as the Romans of 19 centuries ago. So only a few “leaders” care, and those are easily bought, being few in numbers. A revolutionary mob can be misled, but it’s hard to buy. Meanwhile, tax avoidance of the hyper rich has become an industry:
“The Family Office
Each of the top 400 earners took home, on average, about $336 million in 2012, the latest year for which data is available. If the bulk of that money had been paid out as salary or wages, as it is for the typical American, the tax obligations of those wealthy taxpayers could have more than doubled.
Instead, much of their income came from convoluted partnerships and high-end investment funds. Other earnings accrued in opaque family trusts and foreign shell corporations, beyond the reach of the tax authorities.
The well-paid technicians who devise these arrangements toil away at white-shoe law firms and elite investment banks, as well as a variety of obscure boutiques. But at the fulcrum of the strategizing over how to minimize taxes are so-called family offices, the customized wealth management departments of Americans with hundreds of millions or billions of dollars in assets.
Family offices have existed since the late 19th century, when the Rockefellers pioneered the institution, and gained popularity in the 1980s. But they have proliferated rapidly over the last decade, as the ranks of the super-rich, and the size of their fortunes, swelled to record proportions.
“We have so much wealth being created, significant wealth, that it creates a need for the family office structure now,” said Sree Arimilli, an industry recruiting consultant.
Family offices, many of which are dedicated to managing and protecting the wealth of a single family, oversee everything from investment strategy to philanthropy.”
Real philanthropy would consist into paying taxes, of course. What plutocrats call “philanthropy” is just tax avoidance combined with influence multiplier.
…”tax planning is a core function. While the specific techniques these advisers employ to minimize taxes can be mind-numbingly complex, they generally follow a few simple principles, like converting one type of income into another type that’s taxed at a lower rate.
Mr. Loeb, for example, has invested in a Bermuda-based reinsurer — an insurer to insurance companies — that turns around and invests the money in his hedge fund. That maneuver transforms his profits from short-term bets in the market, which the government taxes at roughly 40 percent, into long-term profits, known as capital gains, which are taxed at roughly half that rate. It has had the added advantage of letting Mr. Loeb defer taxes on this income indefinitely, allowing his wealth to compound and grow more quickly.”
Partnerships obscure who owns what, and make it impossible to collect taxes:
“Organizing one’s business as a partnership can be lucrative in its own right. Some of the partnerships from which the wealthy derive their income are allowed to sell shares to the public, making it easy to cash out a chunk of the business while retaining control. But unlike publicly traded corporations, they pay no corporate income tax; the partners pay taxes as individuals. And the income taxes are often reduced by large deductions, such as for depreciation.
For large private partnerships, meanwhile, the I.R.S. often struggles “to determine whether a tax shelter exists, an abusive tax transaction is being used,” according to a recent report by the Government Accountability Office. The agency is not allowed to collect underpaid taxes directly from these partnerships, even those with several hundred partners. Instead, it must collect from each individual partner, requiring the agency to commit significant time and manpower.”
Meanwhile, charities are most giving, most giving to the richest of the wealthiest (and then the rabble thank the great Lords of tax avoidance, for their generosity):
“The wealthy can also avail themselves of a range of esoteric and customized tax deductions that go far beyond writing off a home office or dinner with a client. One aggressive strategy is to place income in a type of charitable trust, generating a deduction that offsets the income tax. The trust then purchases what’s known as a private placement life insurance policy, which invests the money on a tax-free basis, frequently in a number of hedge funds.”
Taxes cannot be collected, because the IRS officially does not have the brain power (in truth, top employees of the IRS may be unwilling to think too hard; the NYT will not say that.)
“Many of these maneuvers are well established, and wealthy taxpayers say they are well within their rights to exploit them. Others exist in a legal gray area, its boundaries defined by the willingness of taxpayers to defend their strategies against the I.R.S. Almost all are outside the price range of the average taxpayer.
Among tax lawyers and accountants, “the best and brightest get a high from figuring out how to do tricky little deals,” said Karen L. Hawkins, who until recently headed the I.R.S. office that oversees tax practitioners. “Frankly, it is almost beyond the intellectual and resource capacity of the Internal Revenue Service to catch.”
The combination of cost and complexity has had a profound effect, tax experts said. Whatever tax rates Congress sets, the actual rates paid by the ultra-wealthy tend to fall over time as they exploit their numerous advantages.”
Where Even The New York Times Discovers That Obama Is A Plutophile:
Obama is a great democrat, revered for Obamacare, first of all a trick to direct more money to the health care plutocracy (although it did a few good things to sugar-coat it). However, under Obama, the richest of the rich got taxed less, and this is even the New York Times which now admits it. And the problem is not the famed 1%, but the really nasty ones, the .1%, the only ones Obama cares about:
“From Mr. Obama’s inauguration through the end of 2012, federal income tax rates on individuals did not change (excluding payroll taxes). But the highest-earning one-thousandth of Americans went from paying an average of 20.9 percent to 17.6 percent. By contrast, the top 1 percent, excluding the very wealthy, went from paying just under 24 percent on average to just over that level.”
Actually, the .1% hide behind the 1%. As I have explain before, and will explain again in the future, the main interest of taxation is to prevent the richest to gather ever more riches, at an ever faster rate, just because they are the richest.
This is what is precisely failing in the West right now. Thus the most important function of taxation, progressive taxation, what differentiated the West from the rest, is failing:
“We do have two different tax systems, one for normal wage-earners and another for those who can afford sophisticated tax advice,” said Victor Fleischer, a law professor at the University of San Diego who studies the intersection of tax policy and inequality. “At the very top of the income distribution, the effective rate of tax goes down, contrary to the principles of a progressive income tax system.”
This, as have argued many times, is how the West, and not just the West, has fallen many times. New York Times:
…”the Managed Funds Association, an industry group that represents prominent hedge funds like D. E. Shaw, Renaissance Technologies, Tiger Management and Third Point, began meeting with members of Congress to discuss a wish list of adjustments. The founders of these funds have all donated at least $500,000 to 2016 presidential candidates. During the Obama presidency, the association itself has risen to become one of the most powerful trade groups in Washington, spending over $4 million a year on lobbying.
And while the lobbying clout of the wealthy is most often deployed through industry trade associations and lawyers, some rich families have locked arms to advance their interests more directly.”
“Some of the most profound victories are barely known outside the insular world of the wealthy and their financial managers.
In 2009, Congress set out to require that investment partnerships like hedge funds register with the Securities and Exchange Commission, partly so that regulators would have a better grasp on the risks they posed to the financial system.
The early legislative language would have required single-family offices to register as well, exposing the highly secretive institutions to scrutiny that their clients were eager to avoid. Some of the I.R.S.’s cases against the wealthy originate with tips from the S.E.C., which is often better positioned to spot tax evasion.
By the summer of 2009, several family office executives had formed a lobbying group called the Private Investor Coalition to push back against the proposal. The coalition won an exemption in the 2010 Dodd-Frank financial reform bill, then spent much of the next year persuading the S.E.C. to largely adopt its preferred definition of “family office.”
So expansive was the resulting loophole that Mr. Soros’s $24.5 billion hedge fund took advantage of it, converting to a family office after returning capital to its remaining outside investors. The hedge fund manager Stanley Druckenmiller, a former business partner of Mr. Soros, took the same step.”
Then the New York Times explains that the part of the IRS after taxpayer earning more than ten million dollars of income a year has been decimated, gutted, with reduction of personnel in some cases going down to zero.
“Several former I.R.S. officials, including Marcus Owens, who once headed the agency’s Exempt Organizations division, said the controversy badly damaged the agency’s willingness to investigate other taxpayers, even outside the exempt division.
“I.R.S. enforcement is either absent or diminished” in certain areas, he said. Mr. Owens added that his former department — which provides some oversight of money used by charities and nonprofits — has been decimated.”
[The Wall Street Journal, owned by the global plutocratic family Murdoch, has a greater distribution than the New York Times. It immediately ran a lead article to counter any damage to the top 400 which the NYT may have visited on their aura: “Tax Rates For Top 400 US Taxpayers Climbed in 2013“.]
Sometimes, in history, a revolution is needed. In Europe, a revolution was needed as early as 1089 CE. But it took seven centuries to come.
However, England was more lucky. Notice that, when the Duke of Normandy and his Frankish barons invaded England, in 1066 CE, he was able to consolidate power because he organized a Revolution, top down. The Duke, now King, outlawed slavery (standard Frankish law; 20% of the population was enslaved). The new King also made the relationship between King and People direct, and established Parliament.
In mainland France, the Revolution came in only in 1789 CE (although there was an important attempt in the middle of the 17 C, just when two Revolutions, and an invasion in quick succession, modernized England; Revolution is contagious: the English “Glorious Revolution was imported from the Netherlands, itself a rogue part freed from Spain, mostly by French military intervention).
After 1789 CE, French plutocracy regrew quickly. In the USA, plutocracy was present in miniature all along, thanks to the existence of slavery. It started to blossom only after Carnegie (who himself was a scathing, and sincere critique of it!). It went on haltingly, as plutocrat Teddy Roosevelt (another enlightened Pluto!) cut down, as president, the most outrageous monopolies.
American plutocracy then focused on Europe, from Franco to Stalin, without forgetting Mussolini and Hitler. The Second World War itself could be fought only with huge manpower, and those more than ten million soldiers, all them trained killers, had to be pleased after 1945, lest they revolt. A time of increased equality ensued, all over the West .
But now here we are: plutocracy is completely out of control. The New York Times article focused only on what can be seen, thus, potentially, taxed. However, most of the money escapes detection outright.
That the New York Times does not seem anxious to focus on. Nor does Hillary Clinton, or even Bernie Sanders. And in Europe, don’t worry, none of the political parties, not even France’s National Front, or the Communist Party, or the New Left, has called on changing the tax structures which exempt the .1%.
However, I claim they are draining the socio-economies. Not just through sheer tax avoidance, but also through the atrocious mental influence they exert. It’s not just the “austerity” insanity, but also the sport score insanities, and other mind numbing and civilization destroying strategies and love fests (complete with adoring Islamism, something which has recently backfired).
If you want humanity, you will have to deprive of power Pluto and its emulators, admirers and other imitators. If you don’t want humanity, you will lose the biosphere, to start with. Shortly before the return of cannibalism, and other discomforts.