IF YOU DRIVE A CAR, I'LL TAX THE STREET. IF YOU TRY TO SIT, I'LL TAX YOUR SEAT. MR. WILSON. MR. HEATH.

There are only three kinds of taxes regardless of the guises politicians pitch the gullible to disguise the tax. There are taxes on wealth, there are taxes on capital and there are permission taxes.

With the rise of Born-Again Socialism revivalist preacher Thomas Piketty, there have been howls for taxes to get levied.

In ELITES SEEK TO PUNISH WORKERS WITH A CONSUMPTION TAX, OR A TAX ON WORKERS' WEALTH, I reveal the sneaky effort of some who seek to claim a consumption tax is not a tax on wealth.

Behind every tax scheme of every politician is a this: You don't have right to your property gained by profit in trade and they lack the duty to keep their hands from your property. 

Said another way: You have the duty to surrender all of your property to the amount that politicians say you do.

Wealth Taxes

Wealth is the name given to property put to purchase and sale for cash and credit. Any tax levied on property in a purchase and sale is a wealth tax.

Wealth taxes go by these names — income tax, capital gains tax, payroll tax, gift tax, estate tax, excise tax, as well as the family of ad valorem taxes such as sales tax, goods and sales tax, land tax, declared worth tax, car registration tax, legal filings tax.

Businesses get taxed on net sales, which are sales less expenses. Unfairly, workers get taxed on gross sales. Workers don't get to deduct their expenses incurred to produce their sales, which is defined as work.

So-called negative income taxes aren't taxes at all. Such is welfare. It's not full freight welfare. It's subsidy welfare, or that which subsidizes the inefficiency of workers who qualify to receive it based on an arbitrary benchmark of income.

A Capital Gains tax is a tax on income derived from the sale of an asset, most often ownership in a firm, which gets called stock or equity, or ownership in a debt owed by a firm, which gets called bond. As a capital gains tax is an income tax, it is a wealth tax.

Payroll taxes to fund social security are wealth taxes as such taxes get levied on income. As always, all taxes on income are taxes on wealth since such taxes get levied on sales in purchases and sales of wealth for wealth.

Payroll taxes that force workers to purchase unemployment insurance all the same are wealth taxes, regardless of the intent. As always, income taxes are wealth taxes. Payroll taxes are wealth taxes.

Excise taxes are taxes levied on the quantity of property being traded. Typical excise taxes are fuel taxes of gasoline and diesel, alcohol taxes on the quantity sold, tobacco taxes on the quantity sold.

Sales taxes as well as GST (goods and services tax) are known as ad valorem taxes since taxes get levied on the sum paid in a purchase and sale. Sales and GST taxes are taxes on wealth. 

Any tax on either unimproved land or improved land also is a tax on wealth whether as a one-time levy or as a recurring levy and also get consider as ad valorem taxes since the tax gets levied on a claimed fictitious resale price. 

Other sneaky ad valorem taxes include taxes on so-called declared worth of things such as car registration fees, taxes on property in chattel sent through mail, tariffs on imports or exports, taxes on cash or bank credits transferred to foreign bankers, taxes on legal document filings related to purchases and sales such as realty deed transfer filings.

Gift taxes and inheritance taxes (also said estate taxes) are among the most pernicious kinds of taxes as such are direct swipes of property by politicians.

When someone gives a gift to another, the gift giver relinquishes property in what is given without pay. As it is a gift, a trade fails to arise as all trades consist of property for property, specifically, wealth for wealth.

Capital Taxes

Capital is the name given to property put to produce work or stock. Any tax levied on property used to produce work or stock is a capital tax.

A tax on capital would be a fee paid to license a dump truck that hauls gravel to pave roads since the dump truck is the capital. If the tax levied levied on the weight of the truck, it is an excise tax. If the tax gets levied on the estimated sales price of the vehicle, it is an ad valorem tax.

A tax on capital would be a fee paid to pollute the air during the blasting of pig iron with pure oxygen while producing steel since the blast furnace is the capital. A tax paid on the tons of pollutants would be an excise tax. A tax paid on the pig iron before its conversion into steel would be an ad valorem tax.

A tax on capital would be a fee paid for a building permit since the labor put to building is capital. 

Permission Taxes

Permission taxes are taxes against the property in oneself. These are the strangest kinds of taxes. 

One kind of permission tax is a marriage license, which is a levy for a legal filing. Another kind of permission tax is a driver's license for personal use.

Permission taxes levied as licenses to do work are capital taxes. So a permission tax for a driver's license for commercial use is a capital tax. A fee paid to have a restaurant inspected before opening is a capital tax. A fee paid for any kind of license authorizing work is a capital tax.

VAT — Value Added Taxes

A VAT (value-added tax) is a wealth tax, though wrongly, many believe such taxes are capital taxes. The key to understand the difference between a wealth tax and a capital tax is this: 

A wealth tax gets levied on what you are trying either to own to rid yourself thereof. A capital tax gets levied on what you own already.

For the seller of product, if the seller bears the burden, a VAT is a wealth tax. A VAT tax can work like a capital tax if the buyer of bears the tax and uses what is acquired in a purchase and sale as capital in production because such a tax inhibits using capital.

Often, a VAT gets levied as an ad valorem tax.

Here are the Beatles in a cartoon!

Here are the Beatles performing their song Taxman.

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ELITES SEEK TO PUNISH WORKERS WITH A CONSUMPTION TAX, OR A TAX ON WORKERS' WEALTH

Tim Worstall is a Fellow at the Adam Smith Institute, which exists as a think tank to promote libertarian and free market ideas. Worstall also writes for Forbes.

Today, Forbes published a work of Worstall's in which Worstall rather stupidly claims a consumption tax is not a tax on wealth. Worstall wrote, "This is rather the point of it in fact: it (consumption tax) entirely exempts wealth from taxation." 

Worstall does not know the first thing about wealth. Wealth is the name given to property put to purchase and sale for cash and credit. 

A consumption tax is a tax on spending on goods, whether chattel or services. Said another way, a consumption tax is a tax on wealth. That is all it ever can be.


The word consumption enters into economics from the Physiocrats. Most economic historians consider the Physiocrats as the first modern economists. The Physiocrats were Frenchmen (Quesney, Turgot, Le Trosne, others) who sought to justify taxation on merchants and financiers while justifying no taxation on farmers. 

In their explanation of a trade, which they called exchange, the word the Physiocrats wrote was consommation, which Englishmen translated as consumption. By consumption, the Physiocrats meant the purchase of something after first gaining the means by selling something else.

Le Trosne said, 

"There is this difference between an Exchange and a Sale, that, in an Exchange, everything is consummated, or completed (consommé) for each party. They possess the thing which they desired to procure, and they have only to enjoy it.

"In the Sale on the contrary, it is only the purchaser who has attained his object, because it is only he who is in position to enjoy. But everything is not ended for the seller.

"Exchange arrives directly at its object, which is consommation (consumption, completion). It has only two terms, and is ended in one contract. But a contract in which money intervenes is not consommé (completed, consumption), but it is necessary for the seller should become a buyer, either himself or by the interposition of the person to whom he transfers the money.

"There are, therefore, in order to arrive at consommation (completion, consumption) which is the ultimate object, at least four terms and three contractants, of whom one intervenes twice."

To the Physiocrats, the trading away of wealth in the form of cash or credit for wealth as products after the cost of production, which they called the produit net, is what they meant by consumption. Thus, the Physiocrats knew at least two kinds of wealth — products of the earth and money. 

Wealth is anything that can be bought or sold. Socrates said so in his dialogue known as the Eryxias. The Romans said so. English jurists of courts since the 1700s have said so. So too have American jurists.

Worstall conflates both capital with wealth as well as production and trade. 

Capital is property put to making stuff.  The name for property put to purchase and sale for cash and credit is wealth. 

Though most think of property as things possessed, property always has meant the right of ownership and never the thing owned. Only when property gets created, can trade arise between two persons.

Production is the use of capital to create property in potential wealth, which all know as stock or inventory when in chattel form, or to create property in actual wealth, which all know as work, in services form. 

Trade is the purchase and sale of property as wealth.

Labor is the poor man's capital. Work sold for wages is wealth. Wages acquired in a purchase and sale of work for wages is wealth. 

So too, is the same for the firm. Machinery and labor are the capital of the firm. Product sold for income is wealth. Income acquired in a purchase and sale of product for income is wealth.

Inventory (stock) is property that has potential wealth and derives from capital. Inventory never sold, though still property, is loss. Inventory does not become wealth until traded. 

Production uses capital. Trade requires wealth.

Until trade happens, nothing is wealth. Though someone has property in a beat-up, used bicycle that goes unsold while on offer at a lawn sale, because the bicycle remains unsold, the used bicycle never becomes wealth. 

However, when bought new in a purchase and sale, the bicycle became wealth of the seller and the cash or credit used to buy the bicycle became wealth of the buyer.

If someone has property in say a house, a banker might consider such property an asset — property that has potential to gain a street price in a purchase and sale. And as such, a banker might consider the asset as collateral, which is property pledged against debt owed on credit borrowed. 

Worstall then goes on to further embarrassment when he writes, "What a progressive consumption tax does do is tax the returns to capital that are then consumed." Brushing aside his horrible grammatical expression, "does do," Worstall reveals that he does not understand commerce and business.

When a capitalist invests, a capitalist uses his wealth to buy a right of action to a share of profit, if any, earned by a firm run by an entrepreneur.  The return to capital is profit. And all profit is income.

Credit capitalists use cash and credit as capital to produce income earned from the shares of profits purchased from entrepreneurs. The credit capitalist lends credit at interest because that is the product the credit capitalist sells.  

In trade, wealth trades for wealth. So credit is the wealth the capitalist sells in a purchase and sale to buy a right of action. The right of action is wealth the entrepreneur sells in a purchase and sale to buy credit.

In his tirade against capitalism, silly-minded Thomas Piketty has said, "...the past devours the future," stealing his famous quip from another Frenchman, philosopher Henri Bergson. Yet, as I show in Thomas Piketty, Revivalist Preacher of Born-Again Socialism. The Second Great Awakening of Socialism has Come to America, wealth in the present that becomes capital creates the future.  In short, the present creates the future! And that is what capitalism and credit is all about. 

Income is the name given to property in cash or credit acquired in a purchase and sale for other wealth. An income tax is a tax on profit and thus the return to capital, but it isn't a tax on capital. It's a tax on wealth. All income taxes are taxes on wealth.

All income is the same, whether gained by the purchase and sale of work for cash and credit or gained by the purchase and sale of rights of action to future profit for cash and credit.

As I say in Interest, Capitalists and Futuristic Time Cops, for a theory to be useful and closer to truth, it must apply equally to many things observed. In agreement, de Fontenay said, "Wherever there is a revenue you perceive capital. The theory of revenue must be the same for all classes of human production." 

Income gained from capital gains is not different at all from income gained by labor. As 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.

A tax on capital would be a fee paid to license a dump truck that hauls gravel to pave roads since the dump truck is the capital. A tax on capital would be a fee paid to pollute the air during the blasting of pig iron with pure oxygen while producing steel since the blast furnace is the capital. A tax on capital would be a fee paid for a building permit since the labor put to building is capital. 

A tax on capital would be an impact fee to develop one's property in undeveloped land. Undeveloped land goes into making improved land — land with structure on it — to become wealth when sold in a purchase and sale for cash and credit, often obtained through a mortgage.

If only Worstall had read my work, Why is the Economy So Horrible? Because Academia Economics is Fake, he could have disabused himself of many false beliefs. For a guy working for a free-markets, libertarian think tank, Worstall doesn't understand capitalism at all.

For most, obvious confusion rests in that most fail to see property means right of ownership and not what is owned.

• So anyone has property in chattel, which are things. 
• So anyone has property in work produced from the mind or the body, such as a surgeon who sells his surgery skills in operation and buys income. 
• So anyone has property in libability — right of action — against a debtor to whom he has lent credit in a purchase and sale of a share of profit.

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. 

A society is association of strangers who have come together because of the desire to trade — to trade property for property, and when we talk about such property, we give it a name, wealth.

To trade, someone needs to produce property — the right of ownership — in chattel, in work or in rights of action — at surplus under efficiency (sales must exceed cost) to gain profit so to buy property in what is wanted (lacking) and sell property in what is not wanted (surplus). 

Bare subsistence manual labor isn't going to produce much property in surplus, if at all. So, producers take to using property in other things, or that which we call capital, to produce property in surplus, or that which we call stock, in hopes of sale, transmutting that stock into wealth; or if they are selling completed work, then transmuting property in labor, which is capital, directly into property in work, which is wealth of the laborer.

For most, their obvious confusion further gets exacerbated because the dynamics of trade — property in various states — is too much for their minds to grasp.

Most get lost in thinking about trade in the same way that most fail to grasp relativity. Thoughts of changing frames of reference are too hard for most to handle.

Capital is one thing and one thing only. The name for property put to making stuff is called capital. Capital is property of production. It doesn’t get much simpler.

So credit lent becomes capital of the entrepreneur used to buy fixed capital (buildings, equipment) or floating capital (electricity, diesel). So wealth used to capitalize a bank becomes the capital of the banker.

All of the names mankind uses for property — capital, wealth, asset, collateral, stock — are names of property in various states — production, trade, estimation, deals of credit, potential sales.

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THOMAS PIKETTY, REVIVALIST PREACHER OF BORN-AGAIN SOCIALISM. THE SECOND GREAT AWAKENING OF SOCIALISM HAS COME TO AMERICA

Socialism Revivalist preacher Thomas Piketty has written the new millennial age bible for crypto-socialists everywhere luring them from the shadows to the new socialist church.

This Second Great Awakening of Socialism is sure to stimulate reformers seeking to remedy the evils of society, which they believe capitalism drives, as they strive to usher in their anticipated Second Coming of progressive Utopia.

This Second Great Awakening, this socialist resurgence could alter life, worsening life for working Americans unless stopped.

Already we have seen mass-scale camp meetings such as Occupy Wall Street. Those who flocked to Occupy Wall Street listened to revivalist oratory and sang hymnody. Many unwitting Americans who watched on their taxpayers' financed, welfare-funded, big, flat screens have been converted to socialistic thought through this enthusiastic preaching.

Second Great Awakening socialist revivalists pull chapter-and-verse from their playbook of trickery railing against purported evils of capitalism, damning capitalists and crying for mercy for all of the down trodden workers and welfare needy-greedies.

Piketty has become the Henry Ward Beecher of the Second Great Awakening of Socialism, luring many to come forth and become worshippers, baptized into a Born-again Socialism.

Piketty's Postmillennialist socialism theology is a call to purify society of capitalism as preparation for the return of Socialist Utopia. This is why Piketty calls for Progressive reforms.

Yet, Piketty's demonic false religion is easily exposed, which I have done in these:

• Thomas Piketty, 696 Pages Of Foolery Destroyed In Less Than Five Minutes
• Ut Oh, Someone Better Tell Thomas Piketty About L > G Too
• More Bad News For Thomas Piketty P > G Too!

SERMON OF THE PAST DEVOURS THE FUTURE

Piketty preaches a fire and brimstone sermon of "the past devours the future." Piketty strives to seduce the minds of seekers with such phrases as 

"A market economy based on private property, if left to itself, contains powerful forces of convergence, in particular with knowledge and skills; but it also contains powerful forces of divergence, which are potentially threatening to democratic societies and to the values of economic and social justice.

"The principal destabilizing force has to do with the fact that the private rate of return on capital, signified as "r", can be significantly higher for long periods of time than that rate of growth of income and output, as signified by "g". 

"Hence, since inequality r > g implies that wealth accumulated in the past grows more rapidly than output and wages, this inequality expresses a fundamental logical contradiction. The entrepreneur inevitably tends to become a "rentier", more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. i.e. the past devours the future."

Few know that Piketty stole his now famous line from the late 19th century-early 20th century French philosopher Henri Bergson (1859–1941) who said, “The pure present is an ungraspable advance of the past devouring the future." 

Bergson is the guy who believed in élan vital, an invisible force that could be harvested, embedded into an inanimate thing, and activated with electricity to create life!

But is it true? Does "wealth accumulated in the past" that becomes capital devour wages and output? It turns out, this is the central contradiction of Piketty rather than capitalism.

According to reality, rather than hoarding their wealth, rentiers take their year before return, levering up their wealth to create more capital, putting their wealth at risk!

In short, the present creates the future! And that is what capitalism and credit is all about. 

In 77 of 84 years, rentiers — landlords and dividends earners — for every $1 rentiers earned, spending on capital rose by more than $1 in the following year. In 69 of 84 years, spending on capital by entrepreneurs — farmers and proprieters — rose by more than $1 for every $1 earned. 

In short, through the genius of credit, capitalists leveraged their wealth to bring forth capital into the now. This is how an economy grows.

Credit is expected profits of the future embodied in property. Thus, credit is a kind of conditional property. Credit embodies estimates of prices for future sales and prices for future outlays.

Credit arises from worthful rights, rights to existing goods, rights to expressible services, rights to future profit should such materialize. The one who extends credit, in truth, buys a right of action against the borrower for a preferential share of profit, should profit materialize.

Reality reveals the irreality of the socialist revivalist preacher Piketty. The irony of it all is that Piketty preaches heresy relative to the reality of trading property for profit, but his preaching gets absorbed as orthodoxy as standard academia economics.

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