Wealth Conservation is not for the 99%

The 99% do not read, much less, understand the tax laws. Those that understand that real power resides in making laws, not only read but write the tax laws.

The arguments that the super rich should pay a higher income tax rate almost sound unfair. And it just maybe, but we tend to overlook (again and again) the definition of income as defined by tax laws. A higher rate on taxable income is not relevant when the taxable income is minute or close to zero.

Wage earners for example have virtually no opportunity to define their wages as anything other than income. Wage earners have always been taxed at the full possible effective rate. This system of taxation will continue to be the law of the land, simply because wage earners do not get involved in changing tax laws because they are too busy providing productive services.

Some wage earners (those with wages in the millions) with enough resources to obtain tax legislation have in many special cases been able to define their wages such that their effective tax rate is less than 50% of the rates applied to the majority of wage earners. This not only sounds unfair I contend that it is actually unfair.

We have not even begun to talk about income that is not derived from wages. This is the holy grail of wealth building and wealth conservation. Royalties paid to your own offshore company? No income therefore no tax, but lots of cash to buy more royalty producing cash flow.

Real estate property may be depreciated and used to reduce taxable income to almost nothing. The reality that most real estate property actually increases in value has no merit in our tax code. Again, more bundles of cash to buy more real estate which can be used to reduce taxes and create more cash flowing into the coffers. When you pass on the real estate is grossed up and your heirs start depreciating this inherited wealth at the new higher value and escape any and all taxes and continue to practically pay no taxes on future income because of this ridiculous inherited depreciation stream (scheme or better said scam). But wait! There is more! Tax preferential treatment is provided in the tax code in the unlikely event one may have to recognize a capital gain (not ordinary income) which is like getting a big discount on the tax on your income.

Yachts, corporate jets, three martini lunches, super bowl tickets and private box at all major sporting events, donations to other super rich organizations whose sole purpose is to provide Saturday and Sunday entertainment. Donor and recipients of such donations do not declare this cash bounty as income. The tax rate is something they consider laughable because (one more time people) income tax only applies to income.

Why do we not see the message proclaimed by those holding all the chips as being the selling job that has allowed the fleecing of the 99%? What great, important and remarkable things have these self-proclaimed kings and emperors accomplished that they deserve such great rewards (hint: lottery winners cannot exist without a lot of losers).

Not much has changed over the centuries; many people love their rulers and pledge their loyalty with a blind zeal. The promise, not the delivery of success is all that is needed to keep those that lack that basic understanding from wielding any real power.

Just how stupid are we (title of a book by Rick Shenkman)? Our next election will tell. When you do go to the polls, remember that the political conservative only cares about the singular definition of conserve and that simply means wealth conservation and little of anything else.

Why do we allow control of practically all assets and resources to be in the hands of a few people who only excel in their exercise of power and wealth conservation skills? Did I say skills? These few people are not skilled or smart, just powerful. So where do we begin? We should study how the wealthy obtained their wealth and how they conserve their wealth. I will address this topic from a perspective that begins and ends with education. Be sure to visit this space for more on this topic for the sake of the future of your successors and heirs.

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