Dear Friends,
It seems to me, Janet Yellen, (and thus her puppeteer’s) plan to tax unrealized capital gains, would have profound long and short term effects on our economy, culture and society. Imagine, the government taxing us on the price inflation of our assets… because they devalued our currency? Profligate money printing already steals money out of our accounts and they want to tax us on the resulting rise in the price of assets. The tax would devastate farming, home ownership, small businesses, the suburbs… and the poor will be hit the hardest. The perverse incentive would make inflation very lucrative for the elite. The higher it is, the higher the unrealized capital gains, as well as printed revenue. Such a tax would be a very efficient means of transferring wealth from the people, to the elite… and keeping it there.
Much, if not all of the asset inflation, is because of Federal reserve money printing. You have to admit, even Ponzi, Madoff or Rice, couldn’t have imagined stealing from their pigeons twice! First by stealing money directly out of the mark’s account, by lowering its value, through raising the money supply. Modern Seigniorage if you will. Then, since the price of an asset rises, because the value of the money it is priced in decreases, they tax that rise in asset price! Stealing the money from our accounts and taxing us on the resulting rise in the prices of our assets… very progressive! Why let us have anything? Take it from both ends. Imagine the arrogance of someone to think so little of us they would do that. Such people are criminals in the worst sense of the term. We could apply reciprocal attribution.
How are farmers, who are asset rich but cash poor, supposed to make it then? More subsidies? The more regulation on agriculture, the more commerce is driven to vertically integrated agribusiness. Corporations have the deep chests, to cough up fecal matter mitigation, to protect watersheds. They can also lobby for special exemptions, clear a path to the subsidies, and keep a representative or two in their pocket. The small farm cannot keep up with the government imposed burdens, disfavor and market manipulations. Now add to them, a tax on the rise in price, not value, of their farmland. People living on rice and beans to keep the family farm alive, will go under, like gun powder deflagrates. I suppose moving agriculture from the people to the corporations is progressive though.
The poor, of course, will be hit hardest. Every taxed asset will immediately turn into a liability, trapping everyone, but the elect, in a cycle of poverty. No one working for minimum wage will ever be able to invest a few bucks into a safe dividend paying stock to build wealth. What about buying a meteoric stock, pay the unrealized tax, then selling it at a huge loss? Getting an apartment house to help pay the mortgage? That would be lunacy under such a tax. A tax on unrealized capital gains would be like the aristocracy closing the doors, trapping us inside, and setting the building ablaze. Does anyone honestly think we will have enough political favor, whether purchased through lobbyists, held by public esteem or earned by benevolent works, to garner the favor to be granted an exemption from the tax?
Obviously, politically favored groups will get special exemptions, favors and corporate welfare, to get them on board. Continuing depending on their ongoing political backing. Since regulation is all about, giving politically favored people and groups an advantage in otherwise free and fair interactions between adults, a tax on unrealized capital gains, as well as being subjective, arbitrary and pernicious, would be the elitist’s dream come true. The elitists, calling themselves progressives again, have taken over the entire establishment, media to schools, and have recently tamed democracy with mail in voting, so now, if they can get all of our accumulated wealth as well, we become chattel to them. If we don’t act, then, as Saint Augustine warned, we will get the government we deserve.
Sincerely,
John Pepin
