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Debt Wish: Loop Fiasco

OBAMA CALLS FOR INCREASED REVENUE BY CLOSING TAX LOOPHOLES — FLASHBACK: FISCAL CLIFF DEAL INCLUDES BILLIONS IN TAX LOOPHOLES… WTF?

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Debt Wish: Loop Fiasco

President Obama on Sunday called for closing tax loopholes in order to increase revenue and reduce the federal deficit. But just over a month ago Washington passed a deal to avert the fiscal cliff that included a host of tax breaks for special interests, while forcing every American to pay a little more.  So when President Obama says we need to close the loopholes to increase revenue, will these sweetheart giveaways be on the chopping block?  Somehow we doubt it.

OBAMA CALLS FOR INCREASED REVENUE BY CLOSING TAX LOOPHOLES

President Obama: Let’s Close Tax Loopholes. “President Barack Obama said there is ‘no doubt’ the government needs new revenue from closing tax ’loopholes’ and limiting deductions, along with enacting spending cuts, to reduce the federal deficit.” (Roger Runningen, “Obama Says U.S. Needs Revenue Along With Spending Cuts,” Bloomberg, 2/4/13)

FLASHBACK: FISCAL CLIFF DEAL INCLUDES BILLIONS IN TAX LOOPHOLES

Fiscal Cliff Bill Extends Tax Cuts For Select Few. “…The ‘fiscal cliff’ bill that passed Congress on Tuesday contained a bonanza for single-issue lobbyists, extending supports for Puerto Rican rum distillers, Hollywood studios, tribal-lands coal, electric-scooter makers and other corporate interests that Congress will subsidize through the tax code for another year or two.” (Editorial, “Congress Gives Out End-of-Year Perks to Interest Groups, Washington Post, 1/2/13)

$100 Billion In Special Tax Credits. “… Under the plan, the federal government would eat nearly $100 billion in forgone tax revenue over the next two years by extending special tax credits for select businesses that had been set to expire.” (Devin Dwyer, “’Fiscal Cliff Deal Also Doles Out Millions for Hollywood, Railroads, Rum Producers,” ABC News1/1/13)

$430 Million For Hollywood. “$430 million for Hollywood through ‘special expensing rules’ to encourage TV and film production in the United States.  Producers can expense up to $15 million of costs for their projects.” (Devin Dwyer, “’Fiscal Cliff Deal Also Doles Out Millions for Hollywood, Railroads, Rum Producers,” ABC News1/1/13)

$59 Million For Algae Growers. (Devin Dwyer, “’Fiscal Cliff Deal Also Doles Out Millions for Hollywood, Railroads, Rum Producers,” ABC News1/1/13)

$331 Million For Puerto Rico And The Virgin Islands Rum Subsidies. (Devin Dwyer, “’Fiscal Cliff Deal Also Doles Out Millions for Hollywood, Railroads, Rum Producers,” ABC News1/1/13)

Extends Tax Credit For Indian Coal Facilities. (“Other nuggets in the fiscal cliff bill: Rum, electric vehicles and motor sports,” CNN Political Ticker, 1/1/13)

Extends Tax Credit For Wind Energy Industry. (Kathleen Caggiano, “Incentives Watch: Fiscal Cliff Legislation Temporarily Bolsters Renewable Energy Industry,” Bloomberg BNA, 1/9/13)

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Wealth is not Created at the Top: It is Only Devoured There

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The UK has left the EU and we can argue about the minutiae of Wealth until we’re blue in the face. But the overriding factors are apparent and in one of the richest countries in the world it is shocking that so many people can’t even be sure if they are going to be able to eat enough today or provide for their loved ones.

These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have “made it”. By the go-getters oozing talent and entrepreneurial-ism that are helping to advance the whole world – Opinion by 

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… across the spectrum virtually all agree that wealth is created primarily at the top and so entrenched is this assumption that it’s even embedded in our language. When economists talk about “productivity”, what they really mean is the size of your paycheck. And when we use terms like “welfare state”, “redistribution” and “solidarity”, we’re implicitly subscribing to the view that there are two strata: the makers and the takers, the producers and the couch potatoes, the hardworking citizens – and everybody else.

Bankers, pharmaceutical giants, Google, Facebook … a new breed of  rentiers are at the very top of the pyramid and they’re sucking the rest of us dry

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In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we hail as “successful” and “innovative” are earning their wealth at the expense of others. The people getting the biggest handouts are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about it. Even for politicians on the left, it’s a non-issue.

To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our “human capital” in economic terms) to create something new, whether that’s a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.

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But there is also a second way to make money. That’s the rentier way: by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others’ expense, using his power to claim economic benefit.

But here comes the rub. Most rentiers are not as easily identified as the greedy banker or manager. Many are disguised. On the face of it, they look like industrious folks, because for part of the time they really are doing something worthwhile. Precisely that makes us overlook their massive rent-seeking…

CONTINUE READING HERE:

The problems we face are that the politicians are firmly in the hands (pockets) of the uber wealthy. We live in a corporate plutocracy and those holding all the wealth and therefore power have no intention of changing the status quo, even if it isn’t sustainable. They remind me of bacteria (or cancer) devouring the host body more and more even though eventually it will kill them too.

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Donald Trump Forgets Important Lesson From Grandad:

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Harper’s Magazine reprints an interesting letter from US President Donald J. Trump’s own grandfather that may get you thinking. Here is it then:

The Emigrants – By Friedrich Trump – From a letter written in 1905 by Friedrich Trump, Donald Trump’s grandfather, to Luitpold, prince regent of Bavaria. Trump had been ordered to leave Bavaria for failing to complete mandatory military service and to register his initial emigration to the United States twenty years earlier.

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Prince Luitpold rejected Trump’s request for repatriation; the family later settled in New York. Translated from the German by Austen Hinkley.

Most Serene, Most Powerful Prince Regent! Most Gracious Regent and Lord!

I was born in Kallstadt on March 14, 1869. My parents were honest, plain, pious vineyard workers. They strictly held me to everything good — to diligence and piety, to regular attendance in school and church, to absolute obedience toward the high authority.

After my confirmation, in 1882, I apprenticed to become a barber. I emigrated in 1885, in my sixteenth year. In America I carried on my business with diligence, discretion, and prudence. God’s blessing was with me, and I became rich. I obtained American citizenship in 1892. In 1902 I met my current wife. Sadly, she could not tolerate the climate in New York, and I went with my dear family back to Kallstadt.

The town was glad to have received a capable and productive citizen. My old mother was happy to see her son, her dear daughter-in-law, and her granddaughter around her; she knows now that I will take care of her in her old age.

But we were confronted all at once, as if by a lightning strike from fair skies, with the news that the High Royal State Ministry had decided that we must leave our residence in the Kingdom of Bavaria. We were paralyzed with fright; our happy family life was tarnished. My wife has been overcome by anxiety, and my lovely child has become sick.

Why should we be deported? This is very, very hard for a family. What will our fellow citizens think if honest subjects are faced with such a decree — not to mention the great material losses it would incur. I would like to become a Bavarian citizen again.

In this urgent situation I have no other recourse than to turn to our adored, noble, wise, and just sovereign lord, our exalted ruler His Royal Highness, highest of all, who has already dried so many tears, who has ruled so beneficially and justly and wisely and softly and is warmly and deeply loved, with the most humble request that the highest of all will himself in mercy deign to allow the applicant to stay in the most gracious Kingdom of Bavaria.

Your most humble and obedient,

Friedrich Trump

… Well then. Long ago, yes.. Still applies? You tell me.

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