Is it Investing or Speculating?

Don't Ask YourBroker

---

 ~ The word "invest" has become debased.

We hear so much about the supposed importance of investor confidence and about the need for low taxes on investors, and all because, the pundits aver, we need investors to invest so that the economy can grow and solve all of our problems.

Bunk.

Anti-Debt Clock

"Pay Your Damn Taxes"

---

 ~ The US Debt Clock, which tracks total US national debt, is the passive voice of fiscal alarm—it doesn't name the subject who inflates that debt. Debt happens! The Anti-Debt Clock is the active voice—it names the wealthy and corporations as major contributors, and quantifies their influence in real-time.

Washington State leads the nation in regressive taxes—the gulf between the heavy tax rates on the less well-off and the wispy rates on the wealthy. Yet we are told by the austerity caucus that we must redress our fiscal problems on the backs of those least able to afford it. That's not fixing the debt; it's fixing the system.

Sextuplicate

IRS Forms Only Your Grandpa Could Love

---

 ~ I expect some of my readers may not even know what carbon paper is, or its somewhat more modern, but still ancient relative, carbonless copy paper. If you have received a W-2 or a 1099-MISC income statement from a small business, however, you may have received it printed on one of these papers.

It is bizarrely retro.

Debt Favors

The Method of Impoverishment

---

 ~ We will soon suffer the endless Kabuki of sham fiscal cliff politics. It will be frustrating and feckless in appearance to most of us, but the wealthy and powerful will be well-served. We are in the midst of an economic struggle for survival which Warren Buffet famously characterized so:

There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning.

And how are they doing that?

Load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain... The aim of financial warfare is not merely to acquire land, natural resources and key infrastructure rents as in military warfare; it is to centralize creditor control over society.

Tracking Consequences

Let's Get Empirical

---

 ~ The inaptly named fiscal cliff has been (temporarily) averted in a deal that, in part, raises taxes on the so-called job creators.

We've been hearing for years—decades even—that higher taxes on the rich would cause them to stop hiring and investment.

Now that their taxes have gone up, let's all pay attention to see whether they actually throw that petulant fit they've been threatening for so long. I'm guessing not.

12 Predictions for 2013

Clarity Moving Beyond the Past

---

 ~ The best part of 2013 is that there won't be a federal election. Consequently, some useful things will get done. There will still be way too much partisan malarkey for my tastes, but the electorate expects action on a host of things and the political dynamic will allow more progress than last year's gridlocked, posturing debacle.

This year's predictions:

Labor Burden

Looking For Something to Reform?

---

 ~ I'd rather see us (temporarily) go over the so-called (and inaptly named) fiscal cliff than "reform" the core programs of the social safety net.

However, if we do end up reforming them, we should start by removing the arbitrary threshold above which earnings are not taxed. This is indefensible as sensible from either a fiscal or social standpoint:

There's lots else that could be done too, especially more equal taxation of labor and capital, but removing special treatment that benefits only the wealthy is really a no-brainer.

The Purpose of Art

To Provoke

---

 ~ The manufactured and fictitious crisis of the so-called fiscal cliff has provoked a lot of people. Time to provoke a broader audience about the real crisis, and to replace the bogus framing of the problem.

We're not broke—we're being looted.

More from Artstrike, including this evocative poem:

Proverbs 22:16
by Elizabeth Conall

what do they care
if we can’t pay
the bills run up
to keep us alive?
to save our kids?
why bother with
expensive care
we don’t deserve?
plenty more
where we came from

Plenty more serfs out there. Read the whole thing.

Welfare Incentives—II

Money for Nothing

---

 ~ Why invest in new products, plant or equipment, and hire more workers (jobs!) to make it happen, when the rate of return is so much higher from lobbying?

Time to cut the subsidies. We can expect corporations to work harder, just as people must, if they have less handed to them for doing nothing.

Welfare Incentives

Our Unmotivated Oil Industry

---

 ~ Big Oil is getting worried about their subsidies going away as part of the action to address the so-called fiscal cliff. Horrors! They might lose their taxpayer-funded welfare! Said a letter signed by a phalanx of 14 lobbies:

Any attempts to target the oil and gas industry for punitive treatment should be avoided as higher taxes could put the economic growth we’ve created at risk.

Yes, I suppose it "could" in the same way buying a lottery ticket "could" make me rich. Fat chance. But whether it is merely possible or not isn't really how we should decide this. Let's focus instead on likely outcomes. If I buy a lottery ticket I will make myself poorer by the cost of that ticket. And the potential "treatment"—reducing or eliminating taxpayer handouts to an insanely wealthy industry—is hardly "punitive." It will simply help out (a tiny bit) on our fiscal problems.

Climate Change Taxes

New Policy Tools

---

 ~ The world probably won't come to an end tomorrow, but it must certainly be close when conservatives start embracing new taxes:

More jobs and growth; reduced deficits without raising income taxes; lower taxes for middle-class families; a kick in the pants to Chinese polluters; and more happiness for American commuters -- one policy instrument can do it all. What's not to love about a carbon tax?

It's been working in British Columbia for a few years now. There's a lot to like about taxing behaviors and outcomes we want to reduce or eliminate.

Demand More Demand

What's Wrong With the Economy?

---

 ~ The short answer:

A slightly longer answer, but more informative and at least as entertaining:

Economically, the solution is both simple and obvious. Politically, the solution is absurdly complicated and the target of endless obfuscation.

The Election's True Colors—II

Not A Center-Right Country

---

 ~ Another revealing electoral map:

The country has rejected GOP economic ideas; time to focus on the middle class, not further coddling of moneyed special interests.

Fixing the Debt

Fixing the Game

---

 ~ A band of CEOs from some of America's largest corporations have united under the banner of Fix the Debt. They argue that the right path to fiscal sanity (and away from the so-called fiscal cliff) entails broadening the tax base and reducing tax rates.

Their argument is disingenuous. A broader tax base with lower rates all around means a tax hike on the middle class and lower taxes for rich CEOs and their companies who have already looted the system for the past decade. Not content with that subterfuge, they're shamelessly lobbying for brand new tax breaks that would benefit only themselves at the expense of everyone else:

The Fix the Debt campaign has raised $60 million and recruited more than 80 CEOs of America’s most powerful corporations to lobby for a debt deal that would reduce corporate taxes and shift costs onto the poor and elderly.

[snip]

The 63 Fix the Debt companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals — a “territorial tax system.” Under this system, companies would not have to pay U.S. federal income taxes on foreign earnings when they bring the profits back to the United States.

The corporate tax burden is lower than it has been in 40 years. They don't want to fix the debt, they want to fix the system.

Debt Fears

How Big is Too Big?

---

 ~ US debt was 76.8% of GDP in 2010, while Singapore's was 107%. Which country will collapse first?

I'm betting neither one.

A Broader Tax Base

The Camel's Nose Under the Tent

---

 ~ Do we really want to broaden the tax base? Will it solve our fiscal problems?

The concept of a broader tax base is quite simple—it means getting more people to pay taxes who are not paying them today. In the case of income taxes (to which this term is almost exclusively applied) it means to change the tax code to make the 47% who currently pay nothing to start paying something.

Many, including Mitt Romney, are trying to have it both ways on this, suggesting that the broadening of the base would both solve the deficit and not result in any tax increases. This is not plausible arithmetic; the 47% will have their taxes raised—period. If you carve out some kinds of floors or exemptions to prevent that then you arrive back where you started—a byzantine tax code without any broader a base.

But there's more to this.

Friends of Tax Reform...

...May Not Be Friends of Big Oil

---

 ~ Both presidential candidates share a stated desire to lower tax rates and simplify the tax code by eliminating deductions and credits. (And also those hardy but elusive scapegoats, fraud, waste and abuse.) Not everyone is fond of this idea, especially Big Oil:

“Tax reform will be a complicated process,” said Comstock, API’s manager for tax policy. “I think our members are wary of how that process will take place.

Unfortunately, tax reform by simplification entails eliminating "loopholes"—but only yours, not mine. Big Oil doesn't receive much public esteem, and their essentially indefensible billions in annual subsidies are under growing scrutiny. Even powerful House Republican and pro-fossil pol Frank Upton is talking about eliminating all energy subsidies, including for oil and gas.

Income Tax

Just in Time, Again

---

 ~ As usual, I got an extension on my tax return and went to the post office in the last hour it was open of the last day to file timely.

I did a lot last year, and worked very hard on a lot of companies and for a lot of clients and organizations. Still part of the 47% and I still paid plenty of other taxes.

Are Norwegians Nuts?

Norway To Double Their Carbon Tax

---

 ~ Big Oil and its apologists inveigh endlessly against a carbon tax and its twinned alternate, a cap-and-trade (or cap-and-dividend) system. Why? Because it will destroy the economy of course!

Burdening oil and other forms of carbon energy with fully pricing their currently externalized costs would dramatically boost the cost of energy, impoverishing consumers and stunting business investment! Economic growth with slow, stop, or even reverse! So we are told.

However, in our northern provincial neighbor, BC, the economy seems to be doing just fine despite several years of an innovative application of just such a measure.

None of the dire predictions of economic catastrophe have come to pass, and there is no longer political opposition to having such a tax. There is a simple and straightforward object lesson here about the hysterical voices in the US Congress shrilling shrieking shibboleths of doom and devastation: they're wrong.

Now Norway is set to do something even more ambitious—more than doubling their existing carbon tax on their (thriving) oil industry. Can they really do that?

Magical Thinking

No Tough Choices Needed

---

 ~ Rather than Jim Lehrer, I'd rather see the next debate moderated by Socrates. He might would ask better questions.