This is not federal gov't, but States are not much better. Why would you want to allow your State to do that to you, to throw you in jail for a year and fine you thousands of dollars for telling people how you voted? The government is full of dirty pigs and dogs, not people. People OTOH need to learn that all government laws and regulations and taxes are corruption by default.
AFAIC every law is corruption. Government would have to do something extraordinary to prove otherwise to me and even if they did prove a law not to be corruption by default, they would have to prove it to me over and over, maybe every week or every month that it is not corruption, because anything that is passed CAN be corruption even if it is not originally intended or used as such.
Exactly. It's just like all these old guys in their early thirties, late twenties, and late teens, who learned CoffeeScript, Clojure, GO, Haskell and HTML5 and are currently unemployed, because nobody uses those things and these old geezers didn't bother learning Moo Tools, DOJO, Qooxdoo, Plex, Taconite, JSmin, Flickrshow, Google, FB and Amazon APIs.
It was a nice ride for those fat-cat geezers, for the couple of years that those CoffeeScript, Clojure, GO, Haskell and HTML5 were used in the industry. It's just a shame everyone has moved on and everything in the industry runs on jQuery and FB plugins.
As I said, inflation is what you don't understand.
1971 when Nixon defaulted on the gold US dollar, the controlled price was 19 dollars per ounce, which was the price even back in 1914. Obviously USA defaulted on the dollar because of this fixed price level, which was artificially set and didn't allow dollar to depreciate against gold to keep people from noticing inflation. By 1981 the price of gold went up to 800USD, what did DOW do? Now, once Volcker set interest rate at 21.5% the price of gold corrected to about 200 USD and stayed there for a few years and started a slow rise with rising inflation.
While inflation was still low compared to 2000 and of-course to today, the stock market was still a sound enough investment strategy (though I am always against people buying things they don't understand), however it stopped being a sound investment strategy with Greenspan's put. Greenspan threw money at every problem to keep the stock market happy, eventually the interest rates were taken down to 1 and then 0. Of-course the recession that followed the implosion of the stock market bubble, which was inflated by the Fed wiped out people's investments.
Your advice is: put money into stock market and leave it there for many many years. Well, over many many years, the government comes in with huge inflation and destroys your purchasing power but also inflates bubbles that burst and then the gov't creates even more inflation to inflate more credit bubbles. That's the actual real scenario, that's the reality we live in, it's not a free market, it's an awful mix of collectivist ideas and special interests by the most connected bankers and such. You can't have a market and a return, there are NO DIVIDENDS.
Your strategy made sense when companies at least paid dividends that definitely covered inflation. Who is paying dividends today? Who is getting over 15 to 22% return to cover inflation and make at least 6%? The reality is that the next implosion of the credit bubble created by the government and the Fed may just take down the dollar itself and it will definitely take down the bonds, but as the gov't bonds go, so will corporate bonds, especially domestic companies. If a company is not selling overseas it may just lose all of its earnings, and if it is selling overseas it may face confiscatory levels of taxation due to gov't declaring 'windfall profit taxes' based on the relative collapse of the dollar value.
Your strategy doesn't take into account the reality, which is this: government is destroying the economy and the money.
Your advice is terrible. If you are investing in a generally bull market and without government inflation, that is one thing. However you missed the part of my comment where I explained about inflation (a subject that is generally not understood by pretty much all people, very few truly understand it). Inflation is destroying your investments even if you are not touching them.
You have to look at your investments relative to the actual purchasing power over time, not to nominal dollar gains or losses. As such, anybody who followed your advice and invested in the stock market this way lost money over the last few decades.
Many of those who invested in the stock market bubble of the nineties got wiped out completely. Those who remained in stocks and bonds got their purchasing power eaten by inflation.
It's easy just to look at the indexes like DOW or NASDAQ and compare their relative change to gold. For example DOW could have been around 11000 in 2001 and 13000 today, but gold was 300 in 2001 and it's over 1685 today. The loss of purchasing power is obvious (from 1/36 to 1/7.7).
Again, I think this is the best thing anybody could do: do NOT invest into things you do not understand, especially during high inflationary environment caused by growth of government. You can find somebody to do it for you, but my point was that the government also makes it very difficult to find people who do it well as opposed to following the specially concocted government formula, which WILL have you mostly in government bonds one way or another (either via actual government debt instrument or via bank or other financial stock or any other 'government approved' way to steal your money from you)/
I am repeating it so that people why may read become aware, obviously the courts are completely corrupt, that's why your comment is 100% true. The justice system does not defend the rule of law and this is the fundamental problem that is becoming the downfall of the country.
Oh, and I forgot to mention something: most people shouldn't be participating in stock market at all. The fact is that participation in the stock market is encouraged by government, which debases your savings with inflation, so you feel that you must do something. Since the interest rates on government bonds is non-existent, I mean it's negative given the inflation rate, you are basically forced into the stock market.
But this a huge problem, most people do not understand the stock market, so the government hands them over to the financial institutions, that basically lobby the government to push people into their hands.
My point is: you should NOT invest in things that you personally do not understand or at least didn't do homework on before you jumped into them. Government encourages people to participate in this giant casino and makes it LOOK like it's safe with various regulations. You think you are safe while in reality you are being robbed and the robbery is endorsed by the government itself. You are much better off either starting your own company if you want to invest or at the minimum to go and find out whatever you can about the company you are investing in. Visit the offices, visit the plants, visit the sites, request to see the books, etc.
If you can't spend the time and you think you can trust somebody to do it for you, I have news for you: you won't be able to choose the best options, you won't be able to choose your account manager based on past performance, because the established industry pushed for the so called 'self-regulations' (FINRA), which are really extension of government power, because you can't operate in that space unless you comply. But that system PREVENTS COMPETITION!
It ensures that you are going to give your money to the biggest crooks, the ones that are most connected to the government, which is working together with these crooks to steal your money from you by all means possible, while pretending you are protected by gov't.
There is no competition, no small money manager can start his own brokerage, it's made impossible with regulations and rules and then with FINRA that prevents advertising based on past performance.
Again: most people shouldn't be in the stock market.
(I recommend that most people buy something of value, assets that withstand inflation if they can't be sure in what they are investing. But your gov't certainly doesn't want you to do that and the tax code proves it as well).
Sure, but this is a matter for the company in question to decide. The question posed in this story assumes that there are only 2 possibilities (false choice), either the company is forced to release information by government or it is not forced. As always in such matters, where the question concerns whether anybody should be forced by government into anything, it completely dismisses the obvious: this is up to the company and its shareholders. The question is not whether a company should be forced to do anything, the question is: is it a company with shareholders that want it to release information or not?
A company can be private or public, in either case no regulations should exist as to what is released to the public! It is up to the company and up to the public to do their homework and decide whether to participate in that business by buying stock in a company that releases or does not release any type of information. SEC is worse than irrelevant, it creates an ILLUSION of safety (as all government programs do), similar to TSA.
Do you think you are safer because of what TSA does?
Do you think you are safer because of what SEC does?
The reality is that no government agency can reduce your risks in life, but government can and does increase your risk of having your money stolen by giving you a false sense of security. Most often than not, your money is stolen by the government in the first place. SEC does not pay attention to obvious fraud in the market. Be it the banks or insurance or Madoff or Enron or whatever, if you think your money is safe because the government is telling you so, then you deserve everything that is coming your way.
Because there are very few individuals, the majority of people today are not individuals, they are biomass, compost, collectivists that are yearning for a central planning authority that would make them wards of the State by taxing the few individuals that exist.
Exchange controls, capital controls, price controls.... all of this is central planning for the sake of some technocrat running a collectivist state, which has a goal of providing equal outcomes to different people, which requires different treatment of different people under law, which means that laws no longer treat people equally, but treat them differently in order to equalize outcomes, and this is slavery, whichever way you want to slice it and even just a thought of this should necessarily be abhorrent to any thinking individual.
Of-course masses do not think, mobs do not think, but individuals do and individual understand that they must fight the mob, the machine, the government, not the individual freedom. You may believe that there is virtue in equalizing outcomes for different people, you may even believe this is good economics, not just 'morality'. Of-course in reality what you are promoting is totalitarianism, either socialism or fascism or nazism, one way or another, this is collectivism based on the idea of central planning authority.
Nazism is socialism that is based on precisely the idea that you just threw out there: exchange controls, capital controls, price controls, eventually border controls. Controls of everything, because you understand that you can't have 'international socialism', so you have to have 'national socialism' and you require dictatorship of the technocrats, it was known as the 'dictatorship of the proletariat' back in the country where I was born, which doesn't exist any longer.
Every thinking individual sees you for what you are and it is not a pretty picture at all.
The Great Depression was caused by the Federal reserve printing money to buy up bad UK debt from France starting in 1925, this inflated the bubble that burst (agriculture equities) and by the way, people like Keynes lost plenty of money in that crash while Hayek predicted it and published the prediction a few months before the bubble burst. Of-course nobody cared about what he published. The recession that followed the crash was fought by Hoover and FDR, who borrowed, printed huge gobs of money to buy up assets that were falling in price and even destroy them, to prevent deflation! That's while people were losing jobs and savings, instead of allowing them to buy cheap food, the gov't made sure there was no food. All the bail outs and stimulus, creation of FDIC, all this nonsense, including huge inflation is what turned that crash into the biggest Depression (until now, since there is so much more riding on that rotten foundation). Of-course in between there were other crashes, all tied to gov't spending, especially the 1970s, when the USA defaulted on the dollar.
But this is about control and growth of power. It's about perception of power as well.
Imagine a government that says: well, we could throw a bunch of money at the problem, but we won't solve it, we'll just postpone it while making the problem bigger. Of-course you, right now, will feel better if we do that, because it will sweep the real problems under the rug for a while.
OTOH: we could do nothing..... let the companies that went bankrupt go bankrupt. Let the market clear the debts, let it restructure the economy, let the companies that are inefficient collapse, let the capital that is used in an inefficient manner be released, let the creditors suffer. Imagine a government that says all of this?
Question becomes, will the DUMB masses (the mob) NOT elect another set of politicians into the office that would immediately offer "the solution", the silver bullet?
I mean what is the main purpose of a politician? Is it to do something that is good for the economy, for the people in the long term or is it to be reelected and to stay in power?
And why do politicians want to stay in power? That's easy. Be it Pelosi or Gingrich or Clinton, whoever it is, they enter the offices without any money and they become millionaires in the process. Is it a surprise that a politician wants to stay in power and thus offers whatever he thinks the STUPID mob wants to stay in power and to make his millions on corruption?
And ALL government IS corruption, there is no part of government that is not corruption, anybody who thinks that just doesn't understand what power is. Government is power and power is corruption, because power allows politicians, executives, whoever is in power, to give themselves money without having to work for it in the private sector. Being in power means being respected, being on TV all the time, having all the money, having all the powerful people talk to you, listen to you, it's a roller-coaster of fun I suppose.
Most people do not want to throw away that ticket but they end up throwing away the future of all (even though the 'all' don't even understand it and think it's good that politicians promise them all the things that cannot be delivered without long term collapse of the economy).
It is wrong to put temptation in the path of any nation, For fear they should succumb and go astray; So when you are requested to pay up or be molested, You will find it better policy to say: --
"We never pay any-one Dane-geld, No matter how trifling the cost; For the end of that game is oppression and shame, And the nation that plays it is lost!"
'Injecting liquidity' to inflate further an exploding bubble is an exercise in futility and it damages the economy further. The bubble was inflated with various instruments that went beyond the limitations imposed by the real money (gold), the bubble was inflated with various derivative bets and the bubble needed to burst and many people needed to lose plenty of money, there is nothing wrong with people losing money, with companies going bust, it's a good thing if the market decides to clear that way from all the dead wood.
In step the bankers and politicians and 'save' the economy by harming it with various 'liquidity injections', however they are manufactured. This causes the current imbalances to grow, the wrong investments to continue (mal-investments) and this prevents cleansing of the market from all the wrong decisions that were made so far. The further economic structures are built upon the faulty foundation and eventually it will collapse. The bankers and politicians figured out how to postpone the real collapse by creating the Federal reserve and eventually allowing it to create infinite amounts of money to buy Treasuries and more than that (even mortgages today). The bigger the structure that is built on top of the faulty foundation the more spectacular will be the collapse.
Honey, nobody gives a hoot about your business model. You are so quick to jump on PayPal, you want it to be a bank? So which bank exactly do you want PayPal to be, bank of America? Citi? HSBC? They are ready to take over that business and handle it with such care, that you'll be out of business in no time.
Maybe you want the same rules are regulations and taxes and laws apply to your eBay store as there are IRL rules and taxes and laws and regulations that apply to Brick and Mortar stores? How quickly would you fold if you had to comply with everything that they have to comply with? It wouldn't take too long, besides, you'd be outsold by their online presense if PayPal is turned into a 'real' bank in the first place.
You think PayPal is bad for business? Nobody prevents you from charing VISA or taking a check for you eBay transactions.
You don't like living off of gov't handouts? So why do you want to turn another company into a bank, so that they could get government handouts? FDIC is a handout. So is Federal Reserve discount window.
Precisely, I wouldn't buy almost anything online if I always had to give my CC number to every merchant, this way PayPal knows my credit card, and I know it knows it, but the other people will have to deal with PayPal not with my credit card. In fact I very rarely buy anything online unless I can proxy the payment through PayPal (and in some cases WebMoney, but that's for a slightly different purpose).
Are you a shill for the political elite, who, I am sure, want to regulate every single thing and creature under the Sun, so they can impose their own costs and controls over everybody?
I don't see transaction costs of PayPal being 'ridiculously high' at all, I like their service. In fact thereAREalternatives (and more), and I do not like them.
If you do not like their transaction costs, why are you using them? Nobody is FORCING you to use them, right? It's not like somebody is standing with a gun to your head, saying: here, use this PayPal, it's 'good for you', or is there?
PayPal's profit margins is their business, saying that banks would blush if they had those profit margins is disingenuous, banks get 'FDIC insurance', banks get fake credit from the Fed, banks post 'record earnings' based on spread they make from Fed's 0% interest rates to Treasury's 2-3% bond purchases.
I don't put debit card into PayPal I use my credit card, if PayPal wants problems it can get them and not from me, from the credit card company. So if your mode of operation: give anybody my banking information and never expect any problems, well, no amount of FDIC and 'consumer protection' will help you.
A bank is a place you would bring your money to for storage, maybe you open a savings account, which means you want your money to be invested (of-course given the fake FDIC insurance, the banks don't even care to hold your money before you can withdraw from your so called 'savings' account, so you know the money is really fake because it doesn't really make any difference to the bank that supposedly it's being loaned out, so you can get a portion of the interest that the bank collects).
PayPal doesn't take your cash and give it out as loans, so at most it is a storage and transaction mechanism. Of-course if you go by the very original idea of what a bank is, then maybe, I suppose the very first banks were just holding deposits and not loaning the money out, but maybe even that is not true.
The point is that for PayPal to be a bank today, it would have to give out loans, that would mean that PayPal doesn't have 100% of the money that it claims it has on hands at any point in time. Is PayPal giving out loans with your deposit there?
Besides, who the hell even HOLDS 'deposits' in PayPal accounts except for merchants? When I buy something via PayPal I just charge it to my credit card, that's all the service is for AFAIC.
If people object that PayPal's 'deposits' are not federally insured - most people in the world hold their money in banks that have no such thing, no federal insurance of any kind, and those banks actually give out loans and hold fractions of the reserves.
PayPal is like online Western Union, a way to move some money from person A to person B, this does not make them a bank.
Why would you want to break something that works for its purpose?
Let me rephrase the question: if you think your money is safer in a 'regulated bank', why would you put it into PayPal?
Again: if you think PayPal is not a safe 'bank' (and it's not a bank, it's a transfer mechanism, they don't give out business loans), then why would you have any significant amount of money sitting in it?
I use PayPal for what I find it convenient for - transfer of small payments. Sometimes I buy something online and pay through PayPal, that's what it is for AFAIC, I don't use it for anything else.
You want to take that and apply all the banking rules to it, do you know what it would do to the transaction cost? I mean in USA alone there are over 100,000 financial regulations, rules, laws that banks and other financial institutions must comply with. Here you have something slightly different, you can use it for what it is, nobody is forcing you to use it as a bank.
Eventually people like you start crying: oh, it is similar to a bank, we must regulate it, otherwise it will..... do what? Hand out Federally 'insured' loans to home buyers that can't afford the purchase?
Wait a second, isn't that what happened with the 'normal', regulated banks? (*and they are highly regulated by the state, just Patriot Act alone turned the banks into a spying application for CIA, DHS and FBI*)
So you want to destroy PayPal's ability to operate, because you want to enforce the existing banking rules upon them, whose side are you on? Clearly you are not on the side of people who use PayPal on daily basis for tiny transactions and find the service extremely useful.
I could have told you this without any studies. This is not news, anybody can see that people who are considered 'to the left' or 'progressives', those who describe themselves as 'for the people' lose ability to think critically when it comes to the inevitable consequences of their ideology. They cannot follow a simple thread of economic analysis based on first principles, they have an immediate emotional response ready for anybody, who suggests that their pattern of thinking is invalid and gives them reasons that explain why that is.
Examples:
whenever I bring up a point that public education should be abolished, the immediate accusation back is: you do not care about education, students, you want people to be uneducated. Obviously this is not what I am talking about at all, the fact is that the education system is broken and cannot be not broken if it is handled by the central planners and the collective via government force, rather than allowed to work itself out in the free market. So it's not being 'against education', it's about being against public funding.
the term 'trickle down economics' is used as a pejorative of some sort, it's not an actual economic theory, it's just something people like to say because they basically oppose free market capitalism. Trickle down economics is a political statement, but it actually means supply side economics. When this is explained to the people and it is shown to them that all economics is supply side and not demand, they revolt not based on any rational thought, they are just upset that their ideology does not stand to scrutiny. How about that demand during the hurricane, is it destroyed? No, but the supply side is interrupted and immediately there are problem. People accuse sellers of 'gouging', not realizing that pricing is a fluid feed back system, prices shouldn't be fixed and if they go up in a disaster, this is simply the most efficient way to allocate scarce resources until the supply lines are restored.
Minimum wages clearly hurt people who have little skills, minimum wage prevents jobs from being created at low pay levels, that would allow people with no skills to enter the workforce and eventually improve their skills and pay level as well. People revolt at the thought that there can be an employment opportunity where the job pays less than some arbitrary level 'at which a person cannot survive on his own'. Well, it can be useful to people who are not still surviving on their own anyway, people who live together with family, friends and share accommodations and other fees. Minimum wage prevents legitimate jobs from appearing by making them illegal, prevents people from getting low paying jobs that would propel them further in their working lives. Minimum wage creates unemployment and dependency because it is of-course coupled with various welfare schemes by government. It is a bad economic policy, but people's emotions stand in the way of understanding this analytically.
income taxes are the most damaging taxes that can possibly exist, because of the effect they have on the economy. There can be no tax invented, if it was tried on purpose, that would hurt the economy as much as income taxes do (well, of-course if owning slaves is not legalized of-course). Progressive tax rate are even worse than just the income tax itself, because while income tax is just an attack on the economy, progressive income tax is also a discriminatory attack on the group of people in the economy that are significantly more important to maintain a working economy. Progressive taxes require discrimination against some people and not against others in order to provide outcomes that are equal for different people. There is an emotional revolt against this simply analysis, it's irrational but it exists and prevents erodes health of the economy.
SS, Medicare, EI and such, these are terrible if handled by government. People revolt against that idea based on an emotional response. "We paid into it, it's a social contract, etc.". A
If the gov't is prevented from collecting taxes on production, so no more income taxes, no more payroll taxes, no more corporate taxes, then the production is not going to be limited artificially by these impediments.
If simultaneously the gov't is prevented from destroying the value of money, by printing them and by setting fake interest rates, then all of a sudden the gov't bonds become an attractive opportunity for people, who do not want to be in the stock market.
Yes, most people shouldn't even be in the stock market, they are forced into the stock market by the gov't regulations and inflation.
But if the bonds paid the real rates of return, then the majority of people could buy gov't bonds and hold on to them for the return, and that would mean that they would be bullish on the economy of their own country.
So the taxes that still would be collected off the transactions (like sales taxes, duties, levies, they are very much Constitutional), these taxes could be used to pay the interest on the gov't bonds.
Now, if the bonds paid the interest, maybe 5-6%, but there was no income taxes, no gov't regulations, then the growth of economy would directly mean more transactions, more taxes from those transactions, more taxes collected from consumption, because all legal taxes are really consumption taxes, not production taxes.
This would mean that production would keep growing and the consumption would pay for consumption.
----
Imagine that, a growing economy, more and more savings (high interest rates), so more and more credit available for various business ventures. The more business activity - the more taxes are collected from transactions.
With high efficiencies in the business due to lack of gov't protections and regulations and thus lack of monopolies and price distortions, the people would be extremely productive, would be working much less than they are now, which, by the way, what the initial industrialization allowed in USA.
People sometimes say: what would happen if ALL jobs were automated, all production would be automated? Well, people would be freed to come up with new things to produce, something that cannot be automated, because the concept doesn't exist yet.
But what about the transition period? Well that is the point of owning part of the economy via the government bonds (or stock market) - you are invested in the economy with these bonds, stocks, and you are paid dividends.
Dividends that are paid to the investors, and everybody becomes an investor.
--
So this is a very much Marxist utopia becomes a reality VIA FREE MARKET CAPITALISM.
All production is owned by the people simply through investments. But the difference between this and all of the forced attempts at Communism and Socialism is that it is NOT FORCED.
This is purely voluntarily, nobody is forced to buy investments, nobody is forced to buy gov't bonds, but if the bonds return a good rate, you'd be stupid not to be invested.
So what? That's not the point, USSR spent everything on military, I mean every non-trivial productive facility had some military application. Where is the country?
To have a sound economy the point is not to spend insane amounts of money on military, the point is to allow the people to save their money and invest it in any way shape or form they themselves desire, they and not some tyrannical technocratic government with a one track mind.
China has the factories and those factories creates everything you buy. USA has 50 or so Billion USD per month trade deficit, had it for decades. That means USA needs to either borrow,k tax or print the difference, to 'afford' this spending ('afford' in quotes, because printing money to buy something does not mean you can afford it, it just means the seller is not recognizing how stupid the transaction is from his POV, he'll never get his money worth of products out of you back).
It doesn't matter if USA 'leads in military technology', what matters is that 90% of all seafood is brought from Asia, and who knows how many other consumer products (you can try and check the inventory in your local Walmart, see what the real percentage of Chinese goods is to other goods, especially to American goods, and then there is the problem of components in whatever American goods that are made, and then tools and machinery, etc.)
You think stealth aircraft carrier with submarine nuclear diving capacity and tachion propulsion system is what a country needs in order to have a good economy?
So if a private company builds a prison, and charges the government $10,000,000 a year to run it, that's "wealth",
- another strawman.
A private company builds a prison, there shouldn't be any government money in it. That's because the criminal and court systems either should be completely public or completely private and obviously the 'completely public' route is the wrong one.
but if the government does it and runs it for $5,000,000 per year, that's waste and draining wealth?
- yes. BTW, USA has more prisoners than all European countries combined. This has something to do with the government being completely on the wrong side of things.
Drug war. These two words should make you stop this line of thinking, because that's something that you cannot defend, it's indefensible.
I just don't get how a road is "wealth" if paid for with private funds (my driveway, a store parking lot) and not "wealth" if built by the government (the road from my drive to the store).
- I understand that you do not. Here, I talked about it long ago.
But here is the point: private sector only does things that increase efficiency, government doesn't build roads for that purpose, it builds roads whether they can be profitable or not, because nobody in government has his personal money in it and is not expecting a return.
If it was left up to the private sector, then the only roads that would be built, would be those that make sense. There wouldn't be roads for the sake of roads or for the sake of government power (H1).
There wouldn't be the urban sprawl, the inefficient, subsidized, environmentally damaging, economically unsound sprawl of houses into the wide areas, the suburbia.
Instead it would be much more concentrated living, people would have to pay a serious premium to live in a suburbia, because it would be up to the corporation that would build it for them to make it all work with profits in it, including the infrastructure.
You absolutely cannot increase productivity by reducing productivity in the bigger economy of scale. You can't take money from a company that produces wealth (yes, products are wealth) and then use that money to pay for various campaign contributions, road building and WTF governments do, that is not productive use of resources, otherwise the free market would be doing it.
Taking money from a company that, for example builds SSDs and spreading that money among 'the poor' does not increase productivity, it only steals from the SSD company. TWICE.
First time it steals from the SSD company when the taxes are taken, the second time it steals from the SSD company when the money that the SSD company CREATED is used to buy their own products.
Actually that's the reason why the Chinese are still not able to buy their own products, because their government does precisely that: it buys US dollars and to do it the gov't prints renminbi. The US dollars are then used to buy US treasuries (not so much anymore, but they are holding them and are still rolling them over). This is the money that China GIVES to USA. Of-course the Chinese products go to USA as well, so the Chinese people are not actually trading, they are accumulating IOUs from USA, they will never be able to cash them in.
With the corporate and income taxes it's a similar situation: the money that the company makes (company creates money by creating wealth, money is just a convenient representation of wealth, without wealth money has no meaning, so without products created by companies, money has no meaning and no value, so the paper is not money) that money that company makes is taken away from the company by gov't by force (threat of violence).
So the company has less money to invest (the people who have less money to invest, will still spend the same, but they will invest less), so company cannot increase its efficiencies as much. Then that same money comes back to the company washed through the gov't and people who did not work for that money.
You think this INCREASES productivity? This STEALS productivity. Any time a person gets some money he didn't work for (in a free market, not gov't, all gov't workers are by definition on welfare even if they have to show up in gov't offices for their 'jobs'), that person uses that money to buy something that was made by a company that was taxed to give this person that money. Any time that happens there is a real multiplier effect of economic destruction.
That person didn't have to work to earn the money, so he didn't add any wealth to the economy, but he is extracting the wealth to spend it, not to produce anything.
Productivity is not in spending, it's not in consuming something, productivity is in producing, creating, manufacturing. Consumption is a trivial consequence of production, not the other way around, consumers do not produce, they are not building factories and products, they are not creating better SSDs or cheaper TVs or whatever. They will be lucky if a company creates an expensive one and the people who are wealthier buy those things (like the first expensive SSDs), so that eventually companies have enough investment to make more efficient production lines and better tech, so that the prices can come down and now the poorer people can get the product.
And yes, actually 'wealth tax' would be less destructive than income tax, it's still a terrible tax, but at least it doesn't tax PRODUCTION, it taxes whatever is allocated for consumption. So an individual could AVOID a wealth tax on all of his investments, while he would probably be taxed on all of the money he allocates for his consumption.
Yes, if the wealth tax only hits CONSUMPTION (if the rich are taxed on the consumption side and not on the investment side), then its hugely less destructive.
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This is not federal gov't, but States are not much better. Why would you want to allow your State to do that to you, to throw you in jail for a year and fine you thousands of dollars for telling people how you voted? The government is full of dirty pigs and dogs, not people. People OTOH need to learn that all government laws and regulations and taxes are corruption by default.
AFAIC every law is corruption. Government would have to do something extraordinary to prove otherwise to me and even if they did prove a law not to be corruption by default, they would have to prove it to me over and over, maybe every week or every month that it is not corruption, because anything that is passed CAN be corruption even if it is not originally intended or used as such.
Exactly. It's just like all these old guys in their early thirties, late twenties, and late teens, who learned CoffeeScript, Clojure, GO, Haskell and HTML5 and are currently unemployed, because nobody uses those things and these old geezers didn't bother learning Moo Tools, DOJO, Qooxdoo, Plex, Taconite, JSmin, Flickrshow, Google, FB and Amazon APIs.
It was a nice ride for those fat-cat geezers, for the couple of years that those CoffeeScript, Clojure, GO, Haskell and HTML5 were used in the industry. It's just a shame everyone has moved on and everything in the industry runs on jQuery and FB plugins.
As I said, inflation is what you don't understand.
1971 when Nixon defaulted on the gold US dollar, the controlled price was 19 dollars per ounce, which was the price even back in 1914. Obviously USA defaulted on the dollar because of this fixed price level, which was artificially set and didn't allow dollar to depreciate against gold to keep people from noticing inflation. By 1981 the price of gold went up to 800USD, what did DOW do? Now, once Volcker set interest rate at 21.5% the price of gold corrected to about 200 USD and stayed there for a few years and started a slow rise with rising inflation.
While inflation was still low compared to 2000 and of-course to today, the stock market was still a sound enough investment strategy (though I am always against people buying things they don't understand), however it stopped being a sound investment strategy with Greenspan's put. Greenspan threw money at every problem to keep the stock market happy, eventually the interest rates were taken down to 1 and then 0. Of-course the recession that followed the implosion of the stock market bubble, which was inflated by the Fed wiped out people's investments.
Your advice is: put money into stock market and leave it there for many many years. Well, over many many years, the government comes in with huge inflation and destroys your purchasing power but also inflates bubbles that burst and then the gov't creates even more inflation to inflate more credit bubbles. That's the actual real scenario, that's the reality we live in, it's not a free market, it's an awful mix of collectivist ideas and special interests by the most connected bankers and such. You can't have a market and a return, there are NO DIVIDENDS.
Your strategy made sense when companies at least paid dividends that definitely covered inflation. Who is paying dividends today? Who is getting over 15 to 22% return to cover inflation and make at least 6%? The reality is that the next implosion of the credit bubble created by the government and the Fed may just take down the dollar itself and it will definitely take down the bonds, but as the gov't bonds go, so will corporate bonds, especially domestic companies. If a company is not selling overseas it may just lose all of its earnings, and if it is selling overseas it may face confiscatory levels of taxation due to gov't declaring 'windfall profit taxes' based on the relative collapse of the dollar value.
Your strategy doesn't take into account the reality, which is this: government is destroying the economy and the money.
Your advice is terrible. If you are investing in a generally bull market and without government inflation, that is one thing. However you missed the part of my comment where I explained about inflation (a subject that is generally not understood by pretty much all people, very few truly understand it). Inflation is destroying your investments even if you are not touching them.
You have to look at your investments relative to the actual purchasing power over time, not to nominal dollar gains or losses. As such, anybody who followed your advice and invested in the stock market this way lost money over the last few decades.
Many of those who invested in the stock market bubble of the nineties got wiped out completely. Those who remained in stocks and bonds got their purchasing power eaten by inflation.
It's easy just to look at the indexes like DOW or NASDAQ and compare their relative change to gold. For example DOW could have been around 11000 in 2001 and 13000 today, but gold was 300 in 2001 and it's over 1685 today. The loss of purchasing power is obvious (from 1/36 to 1/7.7).
Again, I think this is the best thing anybody could do: do NOT invest into things you do not understand, especially during high inflationary environment caused by growth of government. You can find somebody to do it for you, but my point was that the government also makes it very difficult to find people who do it well as opposed to following the specially concocted government formula, which WILL have you mostly in government bonds one way or another (either via actual government debt instrument or via bank or other financial stock or any other 'government approved' way to steal your money from you)/
I am repeating it so that people why may read become aware, obviously the courts are completely corrupt, that's why your comment is 100% true. The justice system does not defend the rule of law and this is the fundamental problem that is becoming the downfall of the country.
Oh, and I forgot to mention something: most people shouldn't be participating in stock market at all. The fact is that participation in the stock market is encouraged by government, which debases your savings with inflation, so you feel that you must do something. Since the interest rates on government bonds is non-existent, I mean it's negative given the inflation rate, you are basically forced into the stock market.
But this a huge problem, most people do not understand the stock market, so the government hands them over to the financial institutions, that basically lobby the government to push people into their hands.
My point is: you should NOT invest in things that you personally do not understand or at least didn't do homework on before you jumped into them. Government encourages people to participate in this giant casino and makes it LOOK like it's safe with various regulations. You think you are safe while in reality you are being robbed and the robbery is endorsed by the government itself. You are much better off either starting your own company if you want to invest or at the minimum to go and find out whatever you can about the company you are investing in. Visit the offices, visit the plants, visit the sites, request to see the books, etc.
If you can't spend the time and you think you can trust somebody to do it for you, I have news for you: you won't be able to choose the best options, you won't be able to choose your account manager based on past performance, because the established industry pushed for the so called 'self-regulations' (FINRA), which are really extension of government power, because you can't operate in that space unless you comply. But that system PREVENTS COMPETITION!
It ensures that you are going to give your money to the biggest crooks, the ones that are most connected to the government, which is working together with these crooks to steal your money from you by all means possible, while pretending you are protected by gov't.
There is no competition, no small money manager can start his own brokerage, it's made impossible with regulations and rules and then with FINRA that prevents advertising based on past performance.
Again: most people shouldn't be in the stock market.
(I recommend that most people buy something of value, assets that withstand inflation if they can't be sure in what they are investing. But your gov't certainly doesn't want you to do that and the tax code proves it as well).
Sure, but this is a matter for the company in question to decide. The question posed in this story assumes that there are only 2 possibilities (false choice), either the company is forced to release information by government or it is not forced. As always in such matters, where the question concerns whether anybody should be forced by government into anything, it completely dismisses the obvious: this is up to the company and its shareholders. The question is not whether a company should be forced to do anything, the question is: is it a company with shareholders that want it to release information or not?
A company can be private or public, in either case no regulations should exist as to what is released to the public! It is up to the company and up to the public to do their homework and decide whether to participate in that business by buying stock in a company that releases or does not release any type of information. SEC is worse than irrelevant, it creates an ILLUSION of safety (as all government programs do), similar to TSA.
Do you think you are safer because of what TSA does?
Do you think you are safer because of what SEC does?
The reality is that no government agency can reduce your risks in life, but government can and does increase your risk of having your money stolen by giving you a false sense of security. Most often than not, your money is stolen by the government in the first place. SEC does not pay attention to obvious fraud in the market. Be it the banks or insurance or Madoff or Enron or whatever, if you think your money is safe because the government is telling you so, then you deserve everything that is coming your way.
Because there are very few individuals, the majority of people today are not individuals, they are biomass, compost, collectivists that are yearning for a central planning authority that would make them wards of the State by taxing the few individuals that exist.
Of-course the only Constitutional income tax is tax on corporate profit, there is no such thing as a 'tax on individual revenue', not even today.
Exchange controls, capital controls, price controls.... all of this is central planning for the sake of some technocrat running a collectivist state, which has a goal of providing equal outcomes to different people, which requires different treatment of different people under law, which means that laws no longer treat people equally, but treat them differently in order to equalize outcomes, and this is slavery, whichever way you want to slice it and even just a thought of this should necessarily be abhorrent to any thinking individual.
Of-course masses do not think, mobs do not think, but individuals do and individual understand that they must fight the mob, the machine, the government, not the individual freedom. You may believe that there is virtue in equalizing outcomes for different people, you may even believe this is good economics, not just 'morality'. Of-course in reality what you are promoting is totalitarianism, either socialism or fascism or nazism, one way or another, this is collectivism based on the idea of central planning authority.
Nazism is socialism that is based on precisely the idea that you just threw out there: exchange controls, capital controls, price controls, eventually border controls. Controls of everything, because you understand that you can't have 'international socialism', so you have to have 'national socialism' and you require dictatorship of the technocrats, it was known as the 'dictatorship of the proletariat' back in the country where I was born, which doesn't exist any longer.
Every thinking individual sees you for what you are and it is not a pretty picture at all.
The Great Depression was caused by the Federal reserve printing money to buy up bad UK debt from France starting in 1925, this inflated the bubble that burst (agriculture equities) and by the way, people like Keynes lost plenty of money in that crash while Hayek predicted it and published the prediction a few months before the bubble burst. Of-course nobody cared about what he published. The recession that followed the crash was fought by Hoover and FDR, who borrowed, printed huge gobs of money to buy up assets that were falling in price and even destroy them, to prevent deflation! That's while people were losing jobs and savings, instead of allowing them to buy cheap food, the gov't made sure there was no food. All the bail outs and stimulus, creation of FDIC, all this nonsense, including huge inflation is what turned that crash into the biggest Depression (until now, since there is so much more riding on that rotten foundation). Of-course in between there were other crashes, all tied to gov't spending, especially the 1970s, when the USA defaulted on the dollar.
But this is about control and growth of power. It's about perception of power as well.
Imagine a government that says: well, we could throw a bunch of money at the problem, but we won't solve it, we'll just postpone it while making the problem bigger. Of-course you, right now, will feel better if we do that, because it will sweep the real problems under the rug for a while.
OTOH: we could do nothing..... let the companies that went bankrupt go bankrupt. Let the market clear the debts, let it restructure the economy, let the companies that are inefficient collapse, let the capital that is used in an inefficient manner be released, let the creditors suffer. Imagine a government that says all of this?
Question becomes, will the DUMB masses (the mob) NOT elect another set of politicians into the office that would immediately offer "the solution", the silver bullet?
I mean what is the main purpose of a politician? Is it to do something that is good for the economy, for the people in the long term or is it to be reelected and to stay in power?
And why do politicians want to stay in power? That's easy. Be it Pelosi or Gingrich or Clinton, whoever it is, they enter the offices without any money and they become millionaires in the process. Is it a surprise that a politician wants to stay in power and thus offers whatever he thinks the STUPID mob wants to stay in power and to make his millions on corruption?
And ALL government IS corruption, there is no part of government that is not corruption, anybody who thinks that just doesn't understand what power is. Government is power and power is corruption, because power allows politicians, executives, whoever is in power, to give themselves money without having to work for it in the private sector. Being in power means being respected, being on TV all the time, having all the money, having all the powerful people talk to you, listen to you, it's a roller-coaster of fun I suppose.
Most people do not want to throw away that ticket but they end up throwing away the future of all (even though the 'all' don't even understand it and think it's good that politicians promise them all the things that cannot be delivered without long term collapse of the economy).
It is wrong to put temptation in the path of any nation,
For fear they should succumb and go astray;
So when you are requested to pay up or be molested,
You will find it better policy to say: --
"We never pay any-one Dane-geld,
No matter how trifling the cost;
For the end of that game is oppression and shame,
And the nation that plays it is lost!"
'Injecting liquidity' to inflate further an exploding bubble is an exercise in futility and it damages the economy further. The bubble was inflated with various instruments that went beyond the limitations imposed by the real money (gold), the bubble was inflated with various derivative bets and the bubble needed to burst and many people needed to lose plenty of money, there is nothing wrong with people losing money, with companies going bust, it's a good thing if the market decides to clear that way from all the dead wood.
In step the bankers and politicians and 'save' the economy by harming it with various 'liquidity injections', however they are manufactured. This causes the current imbalances to grow, the wrong investments to continue (mal-investments) and this prevents cleansing of the market from all the wrong decisions that were made so far. The further economic structures are built upon the faulty foundation and eventually it will collapse. The bankers and politicians figured out how to postpone the real collapse by creating the Federal reserve and eventually allowing it to create infinite amounts of money to buy Treasuries and more than that (even mortgages today). The bigger the structure that is built on top of the faulty foundation the more spectacular will be the collapse.
Honey, nobody gives a hoot about your business model. You are so quick to jump on PayPal, you want it to be a bank? So which bank exactly do you want PayPal to be, bank of America? Citi? HSBC? They are ready to take over that business and handle it with such care, that you'll be out of business in no time.
Maybe you want the same rules are regulations and taxes and laws apply to your eBay store as there are IRL rules and taxes and laws and regulations that apply to Brick and Mortar stores? How quickly would you fold if you had to comply with everything that they have to comply with? It wouldn't take too long, besides, you'd be outsold by their online presense if PayPal is turned into a 'real' bank in the first place.
You think PayPal is bad for business? Nobody prevents you from charing VISA or taking a check for you eBay transactions.
You don't like living off of gov't handouts? So why do you want to turn another company into a bank, so that they could get government handouts? FDIC is a handout. So is Federal Reserve discount window.
Here is eBay's policy on payments with the list of the options
For the lazy:
Allowed:
PayPal
ProPay
Skrill
Paymate
Credit card or debit card processed through the seller's Internet merchant account
Payment upon pickup
Bill Me Later
--
Restricted but still allowed for certain listing categories:
Bank-to-bank transfers (also known as bank wire transfers and bank cash transfers)
Checks
Money orders
Online payment services: Allpay.net, CertaPay, hyperwallet.com, Fiserv, Nochex.com, XOOM
Precisely, I wouldn't buy almost anything online if I always had to give my CC number to every merchant, this way PayPal knows my credit card, and I know it knows it, but the other people will have to deal with PayPal not with my credit card. In fact I very rarely buy anything online unless I can proxy the payment through PayPal (and in some cases WebMoney, but that's for a slightly different purpose).
Are you a shill for the political elite, who, I am sure, want to regulate every single thing and creature under the Sun, so they can impose their own costs and controls over everybody?
I don't see transaction costs of PayPal being 'ridiculously high' at all, I like their service. In fact there ARE alternatives (and more), and I do not like them.
If you do not like their transaction costs, why are you using them? Nobody is FORCING you to use them, right? It's not like somebody is standing with a gun to your head, saying: here, use this PayPal, it's 'good for you', or is there?
PayPal's profit margins is their business, saying that banks would blush if they had those profit margins is disingenuous, banks get 'FDIC insurance', banks get fake credit from the Fed, banks post 'record earnings' based on spread they make from Fed's 0% interest rates to Treasury's 2-3% bond purchases.
I don't put debit card into PayPal I use my credit card, if PayPal wants problems it can get them and not from me, from the credit card company. So if your mode of operation: give anybody my banking information and never expect any problems, well, no amount of FDIC and 'consumer protection' will help you.
OK, why is it a 'loophole'?
A bank is a place you would bring your money to for storage, maybe you open a savings account, which means you want your money to be invested (of-course given the fake FDIC insurance, the banks don't even care to hold your money before you can withdraw from your so called 'savings' account, so you know the money is really fake because it doesn't really make any difference to the bank that supposedly it's being loaned out, so you can get a portion of the interest that the bank collects).
PayPal doesn't take your cash and give it out as loans, so at most it is a storage and transaction mechanism. Of-course if you go by the very original idea of what a bank is, then maybe, I suppose the very first banks were just holding deposits and not loaning the money out, but maybe even that is not true.
The point is that for PayPal to be a bank today, it would have to give out loans, that would mean that PayPal doesn't have 100% of the money that it claims it has on hands at any point in time. Is PayPal giving out loans with your deposit there?
Besides, who the hell even HOLDS 'deposits' in PayPal accounts except for merchants? When I buy something via PayPal I just charge it to my credit card, that's all the service is for AFAIC.
If people object that PayPal's 'deposits' are not federally insured - most people in the world hold their money in banks that have no such thing, no federal insurance of any kind, and those banks actually give out loans and hold fractions of the reserves.
PayPal is like online Western Union, a way to move some money from person A to person B, this does not make them a bank.
Why would you want to break something that works for its purpose?
Let me rephrase the question: if you think your money is safer in a 'regulated bank', why would you put it into PayPal?
Again: if you think PayPal is not a safe 'bank' (and it's not a bank, it's a transfer mechanism, they don't give out business loans), then why would you have any significant amount of money sitting in it?
I use PayPal for what I find it convenient for - transfer of small payments. Sometimes I buy something online and pay through PayPal, that's what it is for AFAIC, I don't use it for anything else.
You want to take that and apply all the banking rules to it, do you know what it would do to the transaction cost? I mean in USA alone there are over 100,000 financial regulations, rules, laws that banks and other financial institutions must comply with. Here you have something slightly different, you can use it for what it is, nobody is forcing you to use it as a bank.
Eventually people like you start crying: oh, it is similar to a bank, we must regulate it, otherwise it will ..... do what? Hand out Federally 'insured' loans to home buyers that can't afford the purchase?
Wait a second, isn't that what happened with the 'normal', regulated banks? (*and they are highly regulated by the state, just Patriot Act alone turned the banks into a spying application for CIA, DHS and FBI*)
So you want to destroy PayPal's ability to operate, because you want to enforce the existing banking rules upon them, whose side are you on? Clearly you are not on the side of people who use PayPal on daily basis for tiny transactions and find the service extremely useful.
You and government of Argentina have something in common.
Always thought that it was a silly use of a distraction, he shouldn't have switched the cups, but should have put his dagger through pirate's neck.
I could have told you this without any studies. This is not news, anybody can see that people who are considered 'to the left' or 'progressives', those who describe themselves as 'for the people' lose ability to think critically when it comes to the inevitable consequences of their ideology. They cannot follow a simple thread of economic analysis based on first principles, they have an immediate emotional response ready for anybody, who suggests that their pattern of thinking is invalid and gives them reasons that explain why that is.
Examples:
Well, here is how a transition period like that should be handled.
If the gov't is prevented from collecting taxes on production, so no more income taxes, no more payroll taxes, no more corporate taxes, then the production is not going to be limited artificially by these impediments.
If simultaneously the gov't is prevented from destroying the value of money, by printing them and by setting fake interest rates, then all of a sudden the gov't bonds become an attractive opportunity for people, who do not want to be in the stock market.
Yes, most people shouldn't even be in the stock market, they are forced into the stock market by the gov't regulations and inflation.
But if the bonds paid the real rates of return, then the majority of people could buy gov't bonds and hold on to them for the return, and that would mean that they would be bullish on the economy of their own country.
So the taxes that still would be collected off the transactions (like sales taxes, duties, levies, they are very much Constitutional), these taxes could be used to pay the interest on the gov't bonds.
Now, if the bonds paid the interest, maybe 5-6%, but there was no income taxes, no gov't regulations, then the growth of economy would directly mean more transactions, more taxes from those transactions, more taxes collected from consumption, because all legal taxes are really consumption taxes, not production taxes.
This would mean that production would keep growing and the consumption would pay for consumption.
----
Imagine that, a growing economy, more and more savings (high interest rates), so more and more credit available for various business ventures. The more business activity - the more taxes are collected from transactions.
With high efficiencies in the business due to lack of gov't protections and regulations and thus lack of monopolies and price distortions, the people would be extremely productive, would be working much less than they are now, which, by the way, what the initial industrialization allowed in USA.
People sometimes say: what would happen if ALL jobs were automated, all production would be automated? Well, people would be freed to come up with new things to produce, something that cannot be automated, because the concept doesn't exist yet.
But what about the transition period? Well that is the point of owning part of the economy via the government bonds (or stock market) - you are invested in the economy with these bonds, stocks, and you are paid dividends.
Dividends that are paid to the investors, and everybody becomes an investor.
--
So this is a very much Marxist utopia becomes a reality VIA FREE MARKET CAPITALISM.
All production is owned by the people simply through investments. But the difference between this and all of the forced attempts at Communism and Socialism is that it is NOT FORCED.
This is purely voluntarily, nobody is forced to buy investments, nobody is forced to buy gov't bonds, but if the bonds return a good rate, you'd be stupid not to be invested.
USA is stagnant but not because it lacks military technology, it does not. It spends more on military than anybody. USA spends more on military than the next top 10 countries combined.
So what? That's not the point, USSR spent everything on military, I mean every non-trivial productive facility had some military application. Where is the country?
To have a sound economy the point is not to spend insane amounts of money on military, the point is to allow the people to save their money and invest it in any way shape or form they themselves desire, they and not some tyrannical technocratic government with a one track mind.
China has the factories and those factories creates everything you buy. USA has 50 or so Billion USD per month trade deficit, had it for decades. That means USA needs to either borrow,k tax or print the difference, to 'afford' this spending ('afford' in quotes, because printing money to buy something does not mean you can afford it, it just means the seller is not recognizing how stupid the transaction is from his POV, he'll never get his money worth of products out of you back).
It doesn't matter if USA 'leads in military technology', what matters is that 90% of all seafood is brought from Asia, and who knows how many other consumer products (you can try and check the inventory in your local Walmart, see what the real percentage of Chinese goods is to other goods, especially to American goods, and then there is the problem of components in whatever American goods that are made, and then tools and machinery, etc.)
You think stealth aircraft carrier with submarine nuclear diving capacity and tachion propulsion system is what a country needs in order to have a good economy?
So if a private company builds a prison, and charges the government $10,000,000 a year to run it, that's "wealth",
- another strawman.
A private company builds a prison, there shouldn't be any government money in it. That's because the criminal and court systems either should be completely public or completely private and obviously the 'completely public' route is the wrong one.
but if the government does it and runs it for $5,000,000 per year, that's waste and draining wealth?
- yes. BTW, USA has more prisoners than all European countries combined. This has something to do with the government being completely on the wrong side of things.
Drug war. These two words should make you stop this line of thinking, because that's something that you cannot defend, it's indefensible.
I just don't get how a road is "wealth" if paid for with private funds (my driveway, a store parking lot) and not "wealth" if built by the government (the road from my drive to the store).
- I understand that you do not. Here, I talked about it long ago.
But here is the point: private sector only does things that increase efficiency, government doesn't build roads for that purpose, it builds roads whether they can be profitable or not, because nobody in government has his personal money in it and is not expecting a return.
If it was left up to the private sector, then the only roads that would be built, would be those that make sense. There wouldn't be roads for the sake of roads or for the sake of government power (H1).
There wouldn't be the urban sprawl, the inefficient, subsidized, environmentally damaging, economically unsound sprawl of houses into the wide areas, the suburbia.
Instead it would be much more concentrated living, people would have to pay a serious premium to live in a suburbia, because it would be up to the corporation that would build it for them to make it all work with profits in it, including the infrastructure.
You absolutely cannot increase productivity by reducing productivity in the bigger economy of scale. You can't take money from a company that produces wealth (yes, products are wealth) and then use that money to pay for various campaign contributions, road building and WTF governments do, that is not productive use of resources, otherwise the free market would be doing it.
Taking money from a company that, for example builds SSDs and spreading that money among 'the poor' does not increase productivity, it only steals from the SSD company. TWICE.
First time it steals from the SSD company when the taxes are taken, the second time it steals from the SSD company when the money that the SSD company CREATED is used to buy their own products.
Actually that's the reason why the Chinese are still not able to buy their own products, because their government does precisely that: it buys US dollars and to do it the gov't prints renminbi. The US dollars are then used to buy US treasuries (not so much anymore, but they are holding them and are still rolling them over). This is the money that China GIVES to USA. Of-course the Chinese products go to USA as well, so the Chinese people are not actually trading, they are accumulating IOUs from USA, they will never be able to cash them in.
With the corporate and income taxes it's a similar situation: the money that the company makes (company creates money by creating wealth, money is just a convenient representation of wealth, without wealth money has no meaning, so without products created by companies, money has no meaning and no value, so the paper is not money) that money that company makes is taken away from the company by gov't by force (threat of violence).
So the company has less money to invest (the people who have less money to invest, will still spend the same, but they will invest less), so company cannot increase its efficiencies as much. Then that same money comes back to the company washed through the gov't and people who did not work for that money.
You think this INCREASES productivity? This STEALS productivity. Any time a person gets some money he didn't work for (in a free market, not gov't, all gov't workers are by definition on welfare even if they have to show up in gov't offices for their 'jobs'), that person uses that money to buy something that was made by a company that was taxed to give this person that money. Any time that happens there is a real multiplier effect of economic destruction.
That person didn't have to work to earn the money, so he didn't add any wealth to the economy, but he is extracting the wealth to spend it, not to produce anything.
Productivity is not in spending, it's not in consuming something, productivity is in producing, creating, manufacturing. Consumption is a trivial consequence of production, not the other way around, consumers do not produce, they are not building factories and products, they are not creating better SSDs or cheaper TVs or whatever. They will be lucky if a company creates an expensive one and the people who are wealthier buy those things (like the first expensive SSDs), so that eventually companies have enough investment to make more efficient production lines and better tech, so that the prices can come down and now the poorer people can get the product.
And yes, actually 'wealth tax' would be less destructive than income tax, it's still a terrible tax, but at least it doesn't tax PRODUCTION, it taxes whatever is allocated for consumption. So an individual could AVOID a wealth tax on all of his investments, while he would probably be taxed on all of the money he allocates for his consumption.
Yes, if the wealth tax only hits CONSUMPTION (if the rich are taxed on the consumption side and not on the investment side), then its hugely less destructive.