Sunday, 16 December 2012

Class Warfare?!?!?

  For the past few years you'll hear many on the right complain about the "Class Warfare" against the "rich","upper class","the job creators".  All because most middle and lower class people think that those that are in the top 2% of earners should pay more in taxes. Instead they often pay a lower effective rate then the average middle class family and sometimes do not even pay any taxes at all.  Some of them even get tax credits even after earning billions. Now don't get me wrong I don't think that just raising the tax rate on the wealthiest 2% is going to do much.  This is because you have so many in that bracket that use loop holes designed for the wealthy to lower their tax burden.  So raising their rates alone would do very little.  Tax rate changes would still need to be coupled with tax reforms that prevent the abusive tax loopholes while still allowing certain large tax exemptions through.

  What do I mean about that?  Well charitable deductions for one.  If we removed or even capped charitable deductions this would have a devastating flow on effect to many organisations like the Red Cross,  Salvation Army, Bill & Melinda Gates foundation, the Foundation Beyond Belief, Harvard University, your local community college and countless other religious and secular organisations established to better our society.  Changing the way the home mortgage deduction can help.  Change it so that it still helps a family buy that home they live in but isn't used by the mega rich to buy another mansion on credit and shift that burden on to middle class Americans. All while using that money they saved on over seas investments that are further shielded by bank accounts in the Cayman islands.

For example  George wants to buy this mansion in Woodstock Vermont for $10,000,000.00.
  George has a personal wealth of over $100,000,000.00 and could buy the property out right but if George mortgages the estate and only pays the interest then effectively he will pay $600,000 a year for that house.  But even then he doesn't pay for that house.  That $600,000 comes right off his taxes so the government pays that $600,000.  George gets to live in that $50,000 a month home for free, can sit on it a few years while property values go up then sell that house for a profit.  All for what?  Paying a little bit of money up front for the interest payment on the loan which he'll get back at the end of the year.  Net gain for George is a $10,000,000 house which if he works it right he might not even pay much in capital gains on and shifts $600,000 per year of tax burden back on to the economy.  He's free to use the $10,000,000 that he might have spent on that house to make other investments.  George isn't limited to doing this just once.  If he wants he can do a few properties like this as long as the banks are happy with his over all debt.  This is the type of thing that is meant when it is said that the tax code is written to help the rich get richer.  That $600,000 tax deduction has to be made up some where.  Either taxing someone else even more, which is what normally happens that the tax burden is shifted to middle income families that can't afford to benefit from these types of tax loop holes or expenditures have to be cut.  That means less police officers, firemen and teachers.  That means less money for libraries.  Less aid to help the poor survive from day to day.

  So if we cap mortgage home deductions at, lets say, $50,000 then that still allows the average family to get the benefit that is there to help people buy the home they live in and remove the loop hole that the mega rich use to shift tax burdens while still earning a nice profit at the end of the day.

  But this isn't the main point of my rant here.  My main point is were is the actual class warfare being waged?    The actual class warfare in America is being waged against the poor and minorities.  It really isn't only class warfare but race warfare.  Look at the drug laws.  If I was caught with 5 grams of crack and went to court I have a 16% better chance of getting off simply because I am white.  If I am convicted and sentenced to 5 years in prison I've got almost 3-5 times greater chance of getting parole then a black man depending on where I'm in prison.  It gets worse too.  If I'm from a well to do family my chance of conviction drops dramatically and not just because mummy and daddy can buy the best lawyers in town for me.  The juries, even with public defenders, let rich kids get away with more then poor kids. Besides if I was rich I wouldn't be using that crack cocaine. I'd be using the old fashion powdered cocaine.  You might be thinking to yourself "So what?" well how much powdered cocaine do you think I could get caught with to earn the same 5 year sentence, if found guilty?  You might be wondering is powdered cocaine a lot less potent then crack per gram and the answer is no.  Chemically they are similar. The high from crack can kick start in a matter of seconds after smoking where powdered cocaine can take a few minutes tho injecting powdered cocaine produces a faster effect.  The highs are slightly different to.  Crack's "high" lasts for 5-10 minutes and  is more intense then powdered cocaine but powdered cocaine's "high" can last up to 60 minutes.   So there are differences there.  But back to the amount I'd have to get convicted with to earn that same 5 year sentence.  Is it 5 grams? Is it 10 grams? Is it 20 or even 40 grams?  To give you perspective 1 gram of cocaine can be cut up into 10 lines and gram of crack is about 3-4 bowls.  Do you give up? Do you know?  The answer is I can be caught with 500grams, 1/2kilogram, ~1 pound or in terms of lines 5,000 lines of powdered cocaine for the same sentence.  And because a rich white guy is more likely to use powdered cocaine combined with all the other factors the punishment for a black man is well over 100 times worse.  If that doesn't convince you the class warfare isn't really against the  poor lets look a other convictions.

  HSBC, Britain's largest bank, was found to be dealing with the top drug dealers in the world.  When say "dealing with" I'm not talking about the dealers having accounts with them and the bank having no knowledge of the clients but actual involvement in helping to launder billions of dollars.  Not only that but the bank new about and dealt with "known terrorists" such as al-Qaeda and helped them also shift and launder money.  The executives that had direct involvement, what happened to them?  Did they get long prison terms for aiding terrorists and drug cartels?  Nope.  The bank itself got a 1.9 billion dollar fine, which amounts to less then 1 months profit for the bank.  What happened to the executives directly involved?  Well they will defer part of their bonuses for the five year period   Wow.  What did they do to get off?  Well in a statement from the US Justice Department Announcement this was said "HSBC, Britain's biggest bank, said it was 'profoundly sorry' for what it called 'past mistakes' that allowed terrorists and narcotics traffickers to move billions around the financial system and circumvent US banking laws".  So in effect they said they were sorry and got off with a fine.

  Meanwhile Stephanie George was sentenced to life in prison 15 years ago for minor drug offences that the actual judge said this to Stephanie: 'Even though you have been involved in drugs and drug dealing,' Judge Vinson told Ms. George, 'your role has basically been as a girlfriend and bag holder and money holder but not actively involved in the drug dealing, so certainly in my judgment it does not warrant a life sentence.'  So she gets life in prison for being the girl friend of a low level drug dealer but the bank executives that directly knew and aided large drug cartels shift billions of dollars have to "defer part of their bonuses"

  Let me ask you now...who the fuck do you think is suffering from class warfare more?  I'll be a rich white guy any day over a poor black man.

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