Tax

There has been much discussion in the media about tax and tax dodgers of late. I find the whole thing interesting and about as accessible as a well greased pig.

On the one hand we have the governments, usually run by the well heeled elites, that sing loudly about taxation being important and about catching tax dodgers. This appeases the masses who think that stuff is being done on their behalf. However, the imposition of tax usually applies to the poorer working man and not to the rich elites themselves. A case in point being lowly Portugal which is currently suffering the highest tax rates on ordinary people in Europe, ostensibly to pay for bail-outs caused by the banking crisis. The banking crisis on the other hand has been demonstrably caused by the rich elites who run the banks and their infernal greed. Primarily, the banks, not just in the U.S.A but worldwide, engaged in a policy of lending to people who had no possibility of paying back the loans and, i'm certain, that that was part of the strategy. The banks reasoned that by lending to people who could not pay, a proportion of the money would be paid by the purchaser, then, at the failure of the loan, the bank would own the property less the sum that the purchaser managed to pay out before the loan failed. A handy way of amassing property based wealth no?

The cynicism of the banks has been even greater because a certain few began to offer a sort of insurance policy that would enable some to profit enormously from the actuality of that failure. The Credit Default Swop or CDS was an incredibly tortuous system of "financial product" that enabled a supposedly disinterested third party to insure the loans taken out by someone else. The trick was that the payout came when the loan failed and the "instrument" was not designed to advantage either the giver nor the receiver of the loan but the third party. These CDS deals had a price and they themselves were traded according to how little you could pay to get the best advantage over the loans most likely to fail. This is exactly like a man who owns a casino saying to another man who owns a casino "Well, we both have rigged games, We know that and I will come to your casino and bet on the roulette wheel. You make sure that your rigged game pays out and I'll pay you a percentage". Then this casino owner goes to someone else and says "I know where there is a rigged roulette wheel. Pay me a percentage of your winnings and I'll give you the formula for winning" Effectively he double-dips.

CDS deals however double, triple and even more dipped and were instrumental in the fall of the banks that failed and kicked off the crisis.

Meanwhile, the well heeled elites who run the banks, are pillars of society and who, because of their good reputations stand for office in the increasingly right-leaning governments of Europe have figured out a way of getting the poor people, who aspired to own property and were sold loans they couldn't afford, to pay for the loans they couldn't afford by taxing them so that the elites can bail out the banks again. Does anyone see irony in this?

Now, back to the subject of this post. Well heeled elites say that they will catch tax dodgers by exposing tax havens and increasing revenues. However, it seems to be carefully arranged that the swarthy oligarchs and johnny-come-lately's are the targets of the real tax gathering system. Meanwhile, the people in power pass laws that enable them to dodge taxation in a perfectly legal way. Millionaires pay a few percent of tax, often less than half of what the man in the street pays. Many millionaires pay none at-all. Most of those are in government somewhere or another.

One wonders how long it will be before people understand what has been done to them and a bit of a revolution starts. Off with their heads?