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From Bill Bonner at The Daily Reckoning.
As our friend Nassim Taleb puts it, the financial system “still has the same disease.”
But it’s being kept alive with massive doses of very expensive medicine – provided by the feds.
So what are they going to do now? They claim to have prevented catastrophe. They say they’ve engineered a recovery. And yet, if they let up on the drugs…the patient dies.
They’re trapped…they’ll have to keep pumping in money for years…until the money runs out.
Naturally, the feds want to raise as much money as they can. So, like bank robbers, they go where the money is – to the “rich.”
Steve Sjuggerud tells us what has happened back at home…in Maryland.
“The state of Maryland couldn’t balance its budget last year. So the state decided the right way to raise tax dollars was to fleece the millionaires… Maryland state politicians created a ‘millionaire’ tax bracket.
“Maryland Governor Martin O’Malley of course expected tax receipts to go up. He said Maryland’s 3,000 millionaires were ‘willing to pay their fair share.’ The Baltimore Sun said the rich would ‘grin and bear it.’
“But the opposite happened…
“Instead of 3,000 Maryland millionaires filing taxes in April 2009, only 2,000 did. According to The Wall Street Journal: ‘Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year – even at higher rates.’
“A friend of mine lives here in Florida. He is not an American citizen. He pays US taxes while he lives here. But under the threat of higher national income taxes, he is contemplating giving up his green card and moving elsewhere.
“When Maryland’s governor raises taxes, Maryland residents leave and government income goes down.
“When the nation’s President raises income taxes, foreigners like my friend leave and government income goes down.
“Unfortunately, YOU CAN’T LEAVE.
“Wait a minute. This is America, land of the free, right?
“Not so fast… The US government will track US citizens everywhere to get tax money. If you leave to work in another country, you still pay US income taxes. America and North Korea are the only countries that tax you on your worldwide income.
“If it gets bad enough, you can just give up your citizenship, right? Nope, you can’t do that either. At least, you can’t do it without paying a potentially massive ‘exit tax.’
“The exit tax acts like an estate tax. If you want to give up your citizenship, you have to give up nearly half your wealth above a certain level. The Economist magazine calls it ‘America’s Berlin Wall.’ Nice, eh?
“Want some more nice? Once you’re gone, you’re not legally allowed to come back and visit family and friends. Yes, if the government decides you have renounced citizenship for tax purposes, a federal law prohibits you from entering the country ever again. (You can look up the rule under 8 USC 1182(a)(10)(E).)
“You can escape states with oppressive taxes. But ‘escaping’ the US – the land of the free – is much more difficult. And you can bet it won’t get any easier as the government needs more and more of your income to pay its bills.”
http://dailyreckoning.com/an-ordinar...-crash-bounce/
Nice, eh?
As our friend Nassim Taleb puts it, the financial system “still has the same disease.”
But it’s being kept alive with massive doses of very expensive medicine – provided by the feds.
So what are they going to do now? They claim to have prevented catastrophe. They say they’ve engineered a recovery. And yet, if they let up on the drugs…the patient dies.
They’re trapped…they’ll have to keep pumping in money for years…until the money runs out.
Naturally, the feds want to raise as much money as they can. So, like bank robbers, they go where the money is – to the “rich.”
Steve Sjuggerud tells us what has happened back at home…in Maryland.
“The state of Maryland couldn’t balance its budget last year. So the state decided the right way to raise tax dollars was to fleece the millionaires… Maryland state politicians created a ‘millionaire’ tax bracket.
“Maryland Governor Martin O’Malley of course expected tax receipts to go up. He said Maryland’s 3,000 millionaires were ‘willing to pay their fair share.’ The Baltimore Sun said the rich would ‘grin and bear it.’
“But the opposite happened…
“Instead of 3,000 Maryland millionaires filing taxes in April 2009, only 2,000 did. According to The Wall Street Journal: ‘Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year – even at higher rates.’
“A friend of mine lives here in Florida. He is not an American citizen. He pays US taxes while he lives here. But under the threat of higher national income taxes, he is contemplating giving up his green card and moving elsewhere.
“When Maryland’s governor raises taxes, Maryland residents leave and government income goes down.
“When the nation’s President raises income taxes, foreigners like my friend leave and government income goes down.
“Unfortunately, YOU CAN’T LEAVE.
“Wait a minute. This is America, land of the free, right?
“Not so fast… The US government will track US citizens everywhere to get tax money. If you leave to work in another country, you still pay US income taxes. America and North Korea are the only countries that tax you on your worldwide income.
“If it gets bad enough, you can just give up your citizenship, right? Nope, you can’t do that either. At least, you can’t do it without paying a potentially massive ‘exit tax.’
“The exit tax acts like an estate tax. If you want to give up your citizenship, you have to give up nearly half your wealth above a certain level. The Economist magazine calls it ‘America’s Berlin Wall.’ Nice, eh?
“Want some more nice? Once you’re gone, you’re not legally allowed to come back and visit family and friends. Yes, if the government decides you have renounced citizenship for tax purposes, a federal law prohibits you from entering the country ever again. (You can look up the rule under 8 USC 1182(a)(10)(E).)
“You can escape states with oppressive taxes. But ‘escaping’ the US – the land of the free – is much more difficult. And you can bet it won’t get any easier as the government needs more and more of your income to pay its bills.”
http://dailyreckoning.com/an-ordinar...-crash-bounce/
Nice, eh?
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