Thread by @BambroughKevin

I see so much complaining about taxes. Here’s a little rant to share my thoughts for those who care. Let’s look taxes in a decision tree.

Governments could in theory simply fund their expenditures with the printing press (and practically speaking they do in large part)

So what would likely happen if there was no taxes and all government expenses were funded via new money creation. Well, it seems to be universal acceptances that spending and inflation would get out of control.

It stands to reason that the lowest income earners will be the most hurt as it’s very difficult to push through wage increases to keep up with inflation.

Also prudent savers would struggle to protect their savings and keep pace with the rising cost of living.

The ‘system’ would likely become even more corrupt and out of control than it is today and like all fiat currencies in history as the money supply expands they will fall continually collapse in value. Currency fluctuations and increasing unwillingness to hold foreign currency

Would also make trade very difficult to manage. Currency volatility would also make long term business planning extremely difficult.

So let’s just say that there obviously needs to be taxation to help keep currencies stable but most importantly to help level the playing field

Taxation therefore in mine mind plays a very important roll of helping to redistribute wealth and protect a the middle class while preventing poverty.

There’s reasons for taxing consumption especially when produced goods also have high disposal costs or environmental costs

But with the capital gains chatter and outrage front and Center this post is really to address the reality of capital gains vs general wage related income.

Fundamentally, income is income and the higher earners in our society are much more likely to be greater savers and investors/speculators and therefore have much larger portions of the income resulting from capital gains

Where I am in Canada we only have to tax half our income from capital gains so in the top tax bracket ~50% tax becomes 25% for capital gains. I’ve always said that this is grossly unfair. I simply don’t believe that those that working in labour with an hourly wage or cash bonus

Should be taxed at 50 percent once they hit the top tier where as those that are able to find ways to shelter income via there business and turn it into future capital gains get to pay half the tax rate

Look at how middle class standard of living is declining and how the vast majority of wealth is continually becoming more concentrated in a smaller percentage of people.

It’s purely a result of an unfair tax system and simple math. Seems to be lots of investors here on Twitter so I expect to everyone understands how compounding investments work.

Basic math dictates that wealth will become increasing concentrated unless you tax wealth growth

In fact you must tax wealth growth at higher than average rates to prevent massive wealth concentration. The wealthy simply have more disposable income and a greater ability to save and compound. It’s a massive struggle for average wage earners to save and invest well

There are also so many tax loop holes and strategies that the wealthy are able to shelter incomes in businesses basically forever and with the trump tax cuts they can pass their holdings on to their children in tax free

Most of us here are North Americans immigrants or descendants of immigrants who came here in large part for the opportunity to do better than we could in countries that for the most part had excessive multi generational wealth

A society with two distinct classes being either haves or have nots is not something that appeals to me or I’d hope most people. We generally believe in fairness and that everyone should have a shot to make it if they work hard and apply themselves.

Well with out fair taxation and in particular fair capital gains tax we will crush that future. It’s already so hard for the youth to obtain advance degrees. The quality of education varies so greatly depending on your zip code. The ability to have time to focus and study...

Is increasingly becoming a privilege for a shrinking percentage of people. Not only are top schools hard to get into and their admission systems shown to be corrupt but the cost is insane. Then you also have massive barriers to entry in top businesses post grad

There is no doubt that there are strong biases in our hiring in many businesses and industries. When I was at Sprott we would get hundreds if not thousands of applications for jobs. So difficult to sort through. So many with top marks and decent schools.

Networking and connections more often than not played a roll in candidate selection. People like to work with people they relate well with or have history, know and trust. Point being, we are well on the way to a greatly divided two class system

So when your investing and making profits perhaps ask yourself if it’s not simply just another form of income and consider those that can’t even scratch up disposable income to invest

Consider why having the luxury to engage in mental labour using your savings to create income should be taxed at half the rate of those that have not choice but to labour in a job and in particular exhausting physical labour.

Wealth is purely relative. A millionaire is poor in a land of billionaires. We need a tax system that gives greater protection and income equality to the middle class or we will lose the middle class all together and soon to follow will be capitalism itself

It’s inevitable that once the middle class suffers enough and is fed up enough the majority of people will want to vote for a bit pendulum swing that could lead us down a path that that the wealthy should be way more concerned about than simply paying reasonable capital gains

Inevitably some jack asses usually respond to my rants like this saying if I feel that way I should give my money away or volunteer to pay more tax myself.

Well, I’ve met many billionaires over the years. I know how they made there money and how they structured business

And investments so they could pay fuck all tax and it’s truly an obscene situation.

The people that seem to whine the most are those that see themselves rising in wealth and getting ahead in this system

Typically those that aren’t that wealthy yet. (The really rich know it’s best to shut up the fuck up and stay out of the spot light. They don’t want there income schemes scrutinized or fingers pointed).

I’ve also dabbled in the charity world both as a donor but also as a volunteer. One thing I learned is the most generous people in this world are by far those that give their time and they are also typically those can least afford to. But they sympathize with those in need

As often they were in the same boat once or are close to some in need. When you consider the average charity volunteers disposable income and the amount of hours they give (there by forgoing to he opportunity to earn more) they by far give the most.

Rather than strong charities I think we would be better off with fairer taxation and better social programs so charities in as great need.

Billionaires and mega rich love to drop into charity events and play hero. They have the luxury to sprinkle around millions

But it’s like wiping crumbs off the dining room table and feeling good you fed the mice. There is no giving until it hurts. In fact it’s pleasurable and totally irrelevant to there net worth or lifestyles.

Our system needs reform and rather than being partisan I think we’d be better served having discussions are what is truly fair and best for a happy healthy society and environment

One thing that always sticks in my mind is the phoney arguments made by the ultra rich greedy capitalists I’ve met surrounding their sense of self importance as necessary allocators of capital and job creators.

Easy to think that when you have all the leverage. When in a position to sit and evaluate investments and create business and jobs or business as well as exploit resources.

But the reality is we are all part of a system, if not for the military and police the average person would not have land ownership. Property ownership is the foundation of our system and it only exists because of taxation and funding or the military and police

Education leads to innovation and with out teachers and school systems things would be very different.

With our hospitals and doctors many of us would have died from various illness or accidents and our lifespans would be much shorter (wealth is compounded big time by the old)

Infrastructure is a key to all we do. With out public utilities, roads, rail, etc again the world would be very different.

So I’m just saying that we need to appreciate that the top earners only the privileged opportunity to do what they do because of the system

In a different era a Bill Gates or Mark Zuckerberg would likely have no better opportunity than to become head of armour polishing or cattle birthing.

Consider books like ‘fooled by a randomness’ that explore the fact that our great leaders are nothing more than lucky

Happen to be born with the right skills and parenting, at the right place and the right time

I often take this convo to ‘historic slave islands’ to illustrate my point.

Imagine the misfortune you would have if your ancestors happened to be captured by slave traders and then shipwrecked on an island like Haiti. Generations before you all struggling to simply feed get food and shelter. Continually fucked with and exploited

Little chance for quality education or employment (let alone investing). Meanwhile most of the rest of the world doesn’t give a shit about you. Other than the fact that the Trumps or the world just want to make sure you aren’t allowed in leave your ‘shit hole’ island or country

The example of how we treat these descendants of shipwrecked slaves is a perfect illustration how cruel and barbaric our global governments are and how most of us are willing to engage in this form slavery still. Happy to get cheap clothes and manufactured goods from these places

And we enjoy them and try not to think about the families that are work long hours 6 days week making our crap.

End of rant... pay your fair share or tax and STFU