2008 US Election & Quadrupling The Inflation Tax
Part I
Daniel R. Amerman, CFA
www.inflationintowealth.com
August 14, 2008
http://www.gold-eagle.com/editorials_08/amerman081408.html
Overview
US presidential candidate Barack Obama has proposed increasing the capital gains tax from 15% to 25%. Unfortunately, the biggest component of investment taxes during inflationary times is not taxation of economic income, but taxation of the government’s destruction of the value of its own currency. As we will explore in the article below, the 1-2 combination of higher inflation and higher investment taxes may mean a quadrupling of the effective real tax rate in 2009. This will have the effect of turning the capital gains tax into an effective asset tax, where all real economic earnings plus a percentage of investment principal are taken through taxation – unless investors take self-defense measures.
Please note that this is a nonpartisan article about finance and economics, with no political judgments made, and with implications that go far beyond just the United States. The heart of the problem for the coming years is the bipartisan problem of impossible promises that the United States government has made for Social Security and Medicare – promises with equivalents that are even more impossible in many other developed nations. At some time over the coming years, regardless of who is elected, either:
* Taxes must climb to confiscatory levels; or
* Promises to retirees must increasingly be broken; or
* The currency must be destroyed (through monetizing the deficits without sufficiently raising taxes), or
* All of the above
Internet Censorship Alert
Internet Censorship Alert: Alex Jones exposes agenda to 'blacklist' dissenting sites (March 14, 2010)
As I predicted, the Obama Administration is trying to shut down the Internet - at least the parts he doesn't like. Barack Obamas regulatory czar, Cass Sunstein has stated that he wants to ban conspiracy theories from the internet. Think about what this means - Every video, every website, every blog, every email, that exposes or just criticizes the government for any reason whatsoever could be labeled a "conspiracy" and taken down. Your home could be raided in the middle of the night, and you could be carted of to jail for criticizing the government. All they have to do is call it a "conspiracy theory".
http://www.youtube.com/watch?v=aqAWmBLFodE
Saturday, August 16, 2008
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