Thursday, May 8, 2014


Today, I read Stop Favoring Investors, Speculators over Middle Class by noted demographer Joel Kotkin, who is one of the few eggheads whom I like.

In the article, Koktin laments about being victim of a mafia-style shakedown when it comes to paying taxes to California legislators. 

Many believe they are middle class, but they are not. In BUT WERE YOU EVER IN THE MIDDLE CLASS?, I strip out the political rhetoric to render the most meaningful definition for the phrase middle class

The middle class consists of those who earn at least 51% of their income from labor and who are free-and-clear title owners to an improved parcel.

Most are among the bottom class. The bottom class consists of those who earn 100% of their income from labor or who are given up to 100% of income from welfare or some combination thereof and who rent their living space. 

Few are among the top class. The top class consists of those who earn at least 51% of their income from investments and who are free-and-clear title owners to an improved parcel, which is land with a house upon it.

The elite of the top class earn 100% of their income from investments.

Kotkin is right as have been many others. The middle class shrinks ever smaller day-by-day. In PARTY OVER OOPS OUT OF TIME. YOU SHOULD HAVE PARTIED LIKE IT WAS 1999, I show that Americans enjoyed a Reagan-Clinton prosperity era but have since suffered under a Bush-Obama hard times era.

Adroitly, Kotin points out, "Most galling is that, while the middle class has endured ever-higher taxes, those who have benefited most from the Bernanke-Obama “recovery” continue to get the biggest tax breaks. This is largely the investor class, who have been able to reap the benefits of the stock-market boom..."

In PAID CORPORATE TAXES IN DEPRESSION! CORPORATE PROFITS IN A BUBBLE!, I show how corporate profits have been in a bubble since Q3 2001 while corporate taxes paid has been in a depression since Q3 2007.

Kotin goes further saying that "the rich and corporations have all sorts of ways to avoid taxation – like offshore accounts – but the real class divider is capital gains." In short, Kotin calls for an overhaul of the federal tax code to "to stop favoring investors and speculators over middle-income earners."

The current bad design of commercial life for Americans has gamed the system unfairly for those afraid of competition. Rightfully, Senators and House members of the U.S. Congress are to blame. 

After all, members of Congress are the men and women who devise all the rules under which you live.  Members of Congress establish all of the regulation to stifle competition, thus protecting some who are entrenched with power.


Kotin proposes what I have proposed for awhile now, taxing all income the same, whether from capital gains or from selling laborAs bad and immoral as income taxation is, as long as income taxation is going to exist, then capital gains should be taxed at the same rate as ordinary wages and salaries precisely because all income is the same.

All income is the same. Claiming there are different kinds of income and then trying to justify one's false beliefs around such is neither scientific nor accurate.

As I explain in REAPING DAY APPROACHES. THE REAPER COMES TO REAP YOU. ANOTHER TAX DAY IN AMERICA COMES, wage earners get shafted because they lack deduction on their capital. Wage earners cannot write off legitimate expenses such as food, which is energy for the mind and for the body; clothing and rent, which are shelters for the body and mind; transport, which is how wage earners bring to market (their workplaces) their wealth for sale (their work); medicine, which is how wage earners restore damaged bodies and minds; fitness, which is how wage earners educate their bodies; and skills acquisition, which is how wage earners educate their bodies and minds.

All taxpayers, who cannot shift their otherwise compulsory tax burdens upon others, subsidize the capital of incorporated firms since the rules of law let enterprise-adventurers write off capital, sometimes as direct expenses and sometimes as depreciation expenses. In short, for incorporated firms, any profits earned get earned on eventually free-to-them capital.

Any trade is merely a purchase and sale for cash or credit, which can be settled by cash. In WHY IS THE ECONOMY SO HORRIBLE? BECAUSE ACADEMIA ECONOMICS IS FAKE, I show the entirety of trade, or commerce, or real economics ties up with two words — property and profit. 

Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade. 
At less than break even, anyone would stop trying to produce property. No one works at a loss.

Labor is the poor man's capital. Capital and labor are not distinct, separate producing agents. 

The wage worker buys living space, food and transport. Those are his as capital needed produce his labor. From his labor, he expresses his skills through time, which all call work. His work is his wealth.

He trades his wealth in a purchase and sale for wages with his employer. Wages are the wealth  his employer trades away.

His wages less his expenses to live become his profit.

The investor or capitalist sells credit or cash and buys a future contract for profit. The entrepreneur-adventurer or borrower sells forward a profit share and buys credit or cash. 

The profit share gets calculated as a multiple of the sum lent or paid. What gets called interest is merely part of the profit share paid out in parts as insurance against loss.

In INTEREST, CAPITALISTS AND FUTURISTIC TIME COPS, I reveal why interest as a kind of income exists.

Let's face it. The American dream, truly which means entering into the middle class, owning a house free-and-clear, has been foreclosed upon for many.

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