My Choice for President

Another thought of wealth increasingly concentrating in the hands of the few relates to the so-called quantitative easing programs that essentially push money into the economy. One basic definition of inflation is "too much money chasing too few goods and services". The basic laws of supply and demand make it pretty clear that if demand surges the price will rise, and it doesn't take much thought to see that artificially pushing money into an economy will result in an increase in demand which in turn will stoke rising prices. The rising prices hurt people on fixed incomes the most (typically these people include pensioners and the poorest), so a program that pushes money into the economy without considering where it ends up will benefit the rich at the expense of the poor.

President Obama has been credited with causing the DJIA to rise back to the levels it was before the 2008 crash. Quite aside from the fact economic cycles work regardless of man-made electoral cycles and economic issues are far more complex than the increasingly silly partisan bickering relating to who happened to be in the White House at any given time, where the DJIA is trading is only part of the picture. If the assorted QE programs do little more than provide money to the wealthiest, who invest it in the stock market because they don't particularly need anything over and above what they are already buying, the market rises without giving any benefit at all to the poorest. Essentially what has happened is that the government has created a fountain of money but only those closest to the fountain get to drink their fill. Those further away maybe get a few splashes, those further still get nothing. But the money the government uses to throw around with carefree abandon has to either be raised through taxation or borrowing, both of which once again hit those towards the bottom end of society who can neither restructure their affairs to avoid the taxes nor lobby government for special treatment.

Avoiding the taxes that are levies according to law is a crime. Nobody assume that crimes will suddenly cease if an inheritance tax were created along the lines mentioned in previous posts. Nobody assumes that crimes always succeed. Crimes are detected with some regularity and some go undetected. This is simply how people and society work. The objection you've raised on the assumption that crime was not envisioned is incorrect, no such crime-free reality was assumed.

Quantitative easing is simply a euphemism for debasing the currency.

MoreCoffee said:

Avoiding the taxes that are levies according to law is a crime.

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Yes, that much is pretty obvious . It doesn't mean that people won't do it, when it's all but guaranteed to go undetected and will save a substantial amount of money.

Nobody assume that crimes will suddenly cease if an inheritance tax were created along the lines mentioned in previous posts. Nobody assumes that crimes always succeed. Crimes are detected with some regularity and some go undetected. This is simply how people and society work. The objection you've raised on the assumption that crime was not envisioned is incorrect, no such crime-free reality was assumed.

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The trouble with inheritance taxes, quite aside from the fact they result in grieving families having to deal with money-grabbing taxmen at the time they really don't need a pile of forms to fill, is that they are easily avoided by some and not by others.

They also create all sorts of other injustices. In the UK a while back there was a case of two elderly sisters who lived together. Neither had ever married, they had always lived together, and they lived in the house left to them by their mother. As their health started to fail they faced the reality that as soon as one of them died the other would be forced to sell the house to pay the inheritance tax. Had they not been sisters they could have said they were lesbians and entered into a civil partnership but, since they were sisters, that avenue was closed to them. Even assuming that an inheritance tax is in any way appropriate, where is the justice in allowing some to escape such a brutal tax with a simple legal construct while others cannot? Where is the justice in telling someone that it's just too bad they have to move out of the home they've lived in for their entire life just because someone else died and the taxman wants his money?

If taxes are to be fair they need to be set at an appropriate level, they must be seen to apply to everyone, compliance with the tax law must be easy, and they must be difficult to avoid paying. When the middle class couple with a house worth more than the threshold but little else in the way of assets gets hit while the millionaire can avoid the tax by simply increasing his spending patterns and diverting some of his spending onto buying things for his children, the tax fails spectacularly on the most basic requirements. They are easy to avoid for the wealthy and therefore hit the wrong people the hardest.

MoreCoffee said:

Quantitative easing is simply a euphemism for debasing the currency.

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Sure, and it hurts the people on a fixed income more than the people who can pretty much write their own paycheck, no?

MoreCoffee said:

Odd you'd say that. Australia has no "death tax" but the USA does. I wonder if that makes you guys socialists?

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It certainly makes the Democrats socialist, which is what their philosophy is based on.

tango said:

Sure, and it hurts the people on a fixed income more than the people who can pretty much write their own paycheck, no?

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Inflation bites most deeply into cash savings. Gold, real estate, and other long lasting material goods usually resist inflation. It would be the wealthy who hold such goods in abundance. The poor and the middle income segments of the population either have few or no assets of that kind.

MoreCoffee said:

Inflation bites most deeply into cash savings. Gold, real estate, and other long lasting material goods usually resist inflation. It would be the wealthy who hold such goods in abundance. The poor and the middle income segments of the population either have few or no assets of that kind.

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Sure, although when inflation is visible (it's currently largely hidden and, in many cases, much higher than official figures suggest) anyone in employment can reasonably ask for their salary to at least more-or-less keep up with it. Those living on a mostly fixed income (pensioners etc) get the centrally manipulated figure which crushes them. Those who can't yet draw a pension and are living on what cash reserves they have are crushed. Those closest to the fountains of money can more or less help themselves to it.

Gold and silver tend to resist inflation, although recent speculation has resulted in some price volatility and there's a growing belief that derivatives are being used to artificially suppress their prices. Since gold is currently around $1400/oz it's easy to see why those on lower incomes won't own much of it but silver is far more affordable for those inclined to invest in it. You can get so-called "junk silver" (typically 90% coins from pre-1965) for around 14-15 times face value, so if you're really stuck for cash you can get a single 90% silver half-dollar for maybe $7, as long as you don't expect it to be pristine.

The main downside of silver is that it takes a lot more space to store than gold due to the lower density and the lower value. A 1oz gold coin is smaller than a 1oz silver coin yet worth roughly 70 times as much. That said, for those inclined to keep silver as a hedge against currency collapse, if you are expecting to have to use coins to barter for goods because fiat currency has become more or less worthless silver coins represent far more manageable sums than gold coins. It's easier to pay for your weekly shopping with what is effectively a $10 coin than with a $1500 coin.