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Commentary |
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Bill Gates Sr. and Chuck Collins came through town promoting their new book in support of maintaining and increasing death taxes. Imagine paying $10 for a glass of orange juice, some Danish and the privilege of listening to these gentlemen explain for two hours their position on taxing inherited wealth. I attended the event, with maybe 100 others, sponsored by the non-profit association of non-profit groups in Louisiana. As the father of the world’s richest man, Bill doesn’t need an introduction. Chuck Collins, on the other hand, may. He is Program Director and co-founder of United for a Fair Economy. (ufenet.org) “UFE raises awareness that concentrated wealth and power undermine the economy, corrupt democracy, deepen the racial divide, and tear communities apart. We support and help build social movements for greater equality.” Certainly sounds noble enough. In the interest of full disclosure, I have not read their book and attended the breakfast with a predisposition to oppose their positions. It did not take a full two hours to confirm my predisposition. To quote my father, “About the only thing most people do with their ignorance is to demonstrate it.” Actually, I was proud of maintaining my forbearance by not jumping up even once to throw the “bullshit” flag. To my surprise, nobody else in an audience of well-dressed, sophisticated, and presumably well educated did either. This unusually polite group paid homage to Bill in spite of his outlandish assertions. Bill stated that the Forbes 400 richest people enjoyed a huge increase in their income last year and got tax breaks as lagniappe. So far, so good. Then he said that the average accumulated wealth for the 400 richest was $400 Billion. That’s right, he said Billion. Next he claimed that taxing that wealth would raise $750 Billion annually. That’s right, he said Billion again. Maybe Bill missed that day in school when the definitions of “average” and “billion” were taught. Bill was so far off base he couldn’t even see the ballpark. Bill Jr., the world’s richest man, has an accumulated wealth of about $45 Billion. The total accumulated wealth for all 400 is about $995 Billion (estimated) in December of 2003 (http://www.forbes.com/richlist2003/rich400land.html). That averages about $2.5 Billion each. Confiscating all of the $995 Billion would cover maybe half of the federal government revenue for a single year. So much for that $750 Billion annually number. If the average was indeed $400 Billion, the total accumulated wealth for the 400 would be $160 Trillion! The annual GDP of America is only about $10 Trillion. Just think of the possibilities. Taxing that wealth at 6.25 percent annually would equal the GDP. For the next 16 years the federal government could pay for everything and nobody would have to work! Of course, there would be a few small problems to be solved. None of the medical service people are working so adequate health care may be in short supply. And without morticians, what becomes of the dead bodies that pile up for 16 years? As the production of food, clothing, shelter, public services, transportation, communication, education, and entertainment ceases, Bill and Chuck might learn some basics about the concept of money. Honestly, the $10 wasn’t wasted. I acquired the information I was seeking; namely, How could these gentlemen be so wrong? The answer: They share two popular misconceptions: 1) Money is wealth. And 2) The primary purpose of taxation is to raise revenue. Dollars represent debt, not wealth. Denominating assets in dollar amounts doesn’t magically turn those assets into dollars. And having an unlimited amount of dollars doesn’t necessarily produce any consumer goods or supplies, i.e. wealth. The primary purpose of taxation is to deprive the American people of a portion of their productive wealth which the government is then free to consume. Taxes are simply the mechanism for making that transfer using dollars for accounting purposes. Lost in all of the rhetoric is the fact that taxes are legalized theft justified on the hypothetical basis of social necessity. Granting the proposition that gross unequal distribution of wealth results in social tension does not justify a Robin Hood scheme of robbing the rich to support the poor. Regardless of justification, all governments collect taxes and at the point of a gun when necessary. But of all the taxation methods available, why use those most inefficient, obnoxious and destructive of personal privacy and freedom? Maintaining death taxes, or worse yet, increasing them, simply rewards an unrestrained government beast with more food. A well fed overindulgent beast grows larger and needs more to eat. Eventually it grows large enough to consume the people feeding it. The NESARA plan suggests an alternate solution. It prohibits taxation in the historical domain (i.e., taxes on earned income, capital gains and death taxes) and adjusts taxes in the future domain (i.e., sales and use taxes imposed on items that will be exchanged in commerce for profit) to allow America’s working families to keep more of the wealth they worked so hard to produce. Benefits for the people under NESARA are calculated in the trillions of dollars, yet the plan has a negative cost. Neither the government nor the large institutions nor the people, either rich or poor, pay anything for implementing NESARA. Its benefits derive from increasing the efficiency of wealth production and reducing the destructive nature of our current tax system. In other words, many of our social problems are self-inflicted and it costs us nothing to stop. Dr. Harvey Barnard |