patrick.net

https://www.coffeeandcovid.com/p/trumps-october-surprise-friday-october

For months, Trump has been chipping away at the income tax. No taxes on tips here, no taxes on Social Security there. Now he’s finally, quietly, without details, letting the media do the work, come all the way out into the open. The New York Times ran a potentially world-changing story yesterday that nobody noticed, headlined, “Trump Flirts With the Ultimate Tax Cut: No Income Taxes at All.

It is finally all coming together and making sense. Tax cuts and tariffs, as explained in the article’s subheadline: “The former president has repeatedly praised a period in American history when there was no income tax, and the country relied on tariffs to fund the government.”

Holy checking account, Batman. ...

But now, you can see the whole thing. Perhaps this is Trump’s October surprise, the unplayed card that Trump held in reserve (and is still keeping the details close to his chest). End the income tax and fund the federal government through tariffs. So simple. Even if it did result in higher prices for foreign goods and services (encouraging domestic alternatives, by the way), it would just be a sales tax.

As Trump pointed out, this can easily work. We’ve run the country this way before, for a long time. This is exactly how we used to do it. The proposal is simple, elegant, and practical. But economists never thought of it, which is why they’ll oppose it.

Only President Trump could have proposed something so radical and right.

No income tax and no sales tax are central tenets of Georgism.

I think Trump will have the Vatican out of the IRS and DC Administration Nexus. The Babylonian debt slavery Ponzi cycle requires the obliteration of creditors and the account holders periodically to balance the books and drive resources ever upward to the oligarchies. This is usually accomplished by strategized war. DC is already bankrupt and in absurd debt.

Who ever knew that the Vatican operation was always about tweaking the debt slavery? The IRS is in Puerto Rico operated by Dominicans. They take the taxes, Vatican decides what their vig is, then they deposit the remainder in the IMF and issue debt bonds back to us at interest from our own money.

I keep reading over and over in Plutarch about crises where the rich own almost all the land and everyone else is deeply in debt. Then finally there is some kind of revolution which redistributes the land and erases the debts.

Happened many times in ancient Greece and Rome. Also, the Old Testament has rules that the land belongs to the 12 tribes in certain allotments which cannot be changed, and that there should be a debt "jubliee" every 50 years.

The key driver of rising income inequality is the stagnation of real wage growth for the bottom 80% or so of U.S. households (Taylor and Ömer 2020). Real wage growth was suppressed below labour productivity growth, and this led to a secular decline in the share of wages (and a rise of profits) in national income. The main cause of the wage growth suppression has been the abandonment of full employment as the primary target of macro policy-making, in favour of inflation control, at the end of the 1970s. Fiscal policy was deprioritized in favor of monetary policy, conducted by independent central banks, single-mindedly focused on building credible reputations as inflation hawks, and counter-cyclical fiscal stabilization was made anathema by subjecting fiscal policy-making to rigid and deflationary rules, irrespective of the business cycle. For a period of time after the global financial crisis of 2008, austerity zealots, dreaming of expansionary fiscal consolidations, intensified the fiscal repression, bringing about one of the slowest and most costly economic recoveries from a crisis in history.

Labour markets were enthusiastically deregulated, with the explicit and generous approval of central banks and governments, to break the structural inflationary power of unions and to create a flexible reserve of surplus workers with no choice but to work in temporary low-wage jobs in what is now known as the ‘gig’ economy. Globalization and offshoring contributed to breaking the countervailing power of organized workers because they offered corporations (the threat of) an opt-out possibility that was not available to workers. Taken together, the change in macroeconomic policy regime produced a structurally low-inflation economy, based on ‘traumatised workers’ in precarious jobs, who could not plausibly fight for higher wages and more secure employment conditions, given their daily struggles and the systemic biases they are facing. The wellspring of cost-push inflation had been radically removed.

Stagnant wages and incomes for the 90% mean that income (and wealth) inequality rises and that aggregate household savings go up (as shown by Mian, Straub and Sufi). Higher household savings reduce consumption demand, which holds up fixed business investment for the domestic market. In effect, aggregate demand growth stagnates, and pressures for demand-pull inflation evaporate. With inflation (and expected inflation) being low in structural terms, central banks lower the interest rate, in accordance with the recommendations based on the monetary policy rules proposed by establishment economics.

The low interest rates, in turn, fuel asset-price bubbles, creating wealth gains for the rich, and over-indebtedness for the bottom 90% of households, which use cheap credit to finance essential expenses on education, medical care and housing. This reinforces wealth and income inequalities, and pushes up asset prices even more, but this does not lead to higher economic growth and better jobs, because the richest 10% use their savings and wealth gains not for investments in the real economy, but to speculate in financial markets. The past two decades have made it abundantly clear that the gains made by the top 10% in financial markets do not trickle down to the real economy.

https://www.nakedcapitalism.com/2024/10/as-german-industry-implodes-countrys-wealthiest-make-out-like-bandits.html