As you may have noticed, the economy of not only the US but the world has been suffering for the last few years. Obviously we need economic growth.
But it isn’t obvious to our international ruling class. The only problem they see with the economic hard times is that the government is not able to squeeze more revenue out of the populace to use as leverage for more debt and spending.
From the Wall Street Journal:
In his November investment commentary for bond giant Pimco, Mr. Gross asks the “Scrooge McDucks of the world” to accept higher personal income taxes and to stop expecting capital to be taxed at lower rates than labor. As for the IMF, its latest Fiscal Monitor report argues that taxing the wealthy offers “significant revenue potential at relatively low efficiency costs.” The context for this argument is the IMF’s expectation that in advanced economies the ratio of public debt to gross domestic product will reach a historic peak of 110% next year, 35 percentage points above its 2007 level.
Between 2008 and 2012, several of the developed world’s most fiscally challenged nations (including the United Kingdom, Ireland and Spain) increased top personal income tax rates by an average of 8%. In the United States, the expiration of the Bush tax cuts pushed the highest federal income tax bracket to 39.6% from 35%.
What the IMF calls “revenue-maximizing top income tax rates” may be a good indication of how much further those rates could rise: As the IMF calculates, the average revenue-maximizing rate for the main Organization of Economic Cooperation and Development countries is around 60%, way above existing levels.
For the U.S., it is 56% to 71%—far more than the current 45% paid in federal, state and local taxes by those in the top tax bracket. The IMF singles out the U.S. as the country where raising top rates toward 70% (where they were before the Reagan tax cuts) would yield the most revenue—around 1.25% of GDP. And with a chilling candor, the IMF admits that its revenue-maximizing approach takes no account of the well-being of top earners (or their businesses).
By admitting they hadn’t bothered to investigate how the high rate would affect top earners, the IMF is revealing that they don’t care how much their suggested policies would damage the economy. It is a breathtaking display of apathy about basic human prosperity. Furthermore, the IMF is also suggesting a “10% levy on households’ positive net worth would bring public debt levels back to pre-financial crisis levels.” In other words they are openly calling for the robbery of everyone. With the precedent of what happened in Cyprus, there is no question that they are being serious.
We are being led by the most dangerous kind of criminals—criminals who are not only ethically deficient, but who can’t understand how their ideas will damage their own interests. Southern Europe is already “simmering.” These kinds of policies would make them explode.