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December 5, 2014



How can such things as described in Part II happen? Where are our politicians who take seriously their mandate to represent the people? Who is protecting us from the consequences of allowing the greedy elite among us to dictate policy for all of us (and pick our pockets in the process)? Is there some single policy – grand conspiracy afoot? Answer – probably not yet, rather just a series of mini-conspiracies at this juncture, but we are headed the wrong direction toward total corporate control and loss of our democracy in addition to acceleration of the demise of capitalism as our economic system (per Piketty).

I don’t think we have reached such a Caesar-Brutus sophisticated level of intrigue just yet. We are rather victims (as David Cay Johnston points out in his new book (Divided: The Perils of Our Growing Inequality) of policies that come into play via a drip, drip, drip of official favors. These changes occur quietly, are rarely subjects of mainstream press discussion, and are consequently mysteries to most Americans. Staying at home on Election Day and remaining ignorant of what is really going on in the back rooms of Congress assure that such legalized thievery will continue unabated. In my view, it is past time to make such legalized thievery illegal – way past time.

The GAO is trying to end this ridiculous disparity in policy treatment where the poor pay the rich’s taxes due to the latter’s control of the taxing process via political influence. The agency has recommended that Congress could “reorient” existing laws so that all taxpayers have access to the same investment strategies for IRAs. It said Congress could limit the types of investments held in IRAs, setting a minimum required value for IRA investments, or set a ceiling on accumulations in an IRA and require an immediate distribution of balances above that ceiling. Amen! Why the “or?” How about all of the above?

The GAO’s attention to this misuse of the idea of independent retirement accounts by the superrich and moneychangers was drawn from inquiries of many who learned that Mitt Romney had a traditional IRA of some $101 million (as previously noted) and, worse, the move of technology magnate Max Levchin to put more than 13.3 million shares of Yelp stock in a Roth IRA just before the firm went public. What in the world can such a move have to do with augmenting Levchin’s social security upon retirement? It is disgustingly clear that the purpose of the statute has been perverted to investments made by the greedy to beat the tax rap and hand the shortfall for you and me to make up to our treasury. Already victims of outsourcing and bailouts and chronic wage and wealth inequality, we are now called upon as a matter of public policy to fund the King Midas class among us. Something is rotten in the state of Denmark and the condition has spread to epidemic proportions in Washington, D.C.

Unfortunately, the GAO can only make recommendations; it cannot come up with rules and regulations which flesh out the intent of Congress in passing the act in the first place. That is the preserve of Congress which passes, amends and repeals laws upon which rules and regulations must be based, so good luck! The lackeys (or some of them in crucial legislative positions) have already been bought and paid for. Such members of Congress should be identified and removed irrespective of party status since it can fairly be said that they are enemies of the people.


As proof, when given a choice between serving the peoples’ interests and that of their campaign-contributing superrich benefactors, guess which these craven “representatives” choose? Let’s wax philosophical for a moment. The answer to the query just posed is obvious and in consonance with the corporate principle of profits over people. The situation was bad enough when we fought wars to protect their property and kept order so that they could prosper. Now we are called upon to pay their taxes as well via their machinations of the political process, and that is a bridge too far. When does our subjugation via this new form of corporate feudalism end – or does it? When will America wake up?

We have to understand that the reason the superrich are enjoying such enormous incomes is not because they suddenly got smarter and built better mousetraps; it is because of government policy, and freedom or reduced exposure to taxes by legislative edict is one of such “policies” whether bought or not. Nor is such maldistribution of wealth some God-given natural right or “invisible hand” Adam Smith-type outcome. It is rather, as cogently noted by Eric Schneiderman, New York state attorney general, as follows: “The distribution of wealth is not determined by nature. It is determined by policy.” He is right. He could have noted a corollary; that the maldistribution of wealth (via wage and wealth inequality) is also determined by policy. In plain words, it is government policy that makes rich people rich and poor people poor. It has succeeded in making the rich people richer but has done nothing for the rest of us.

How could this policy disparity go on and on and on? Here’s how, as suggested by David Cay Johnston in his book above cited. He correctly writes that Congress and courts have taken away economic power from workers under policies begun by Reagan, the only union president to become a United States president. Our “leaders” have handcuffed IRS tax auditors, job-safety inspectors, public health workers and others – all of which amount to a huge but subtle subsidy to tax cheats, reckless business operators and others who act with often-callous disregard for their fellow Americans. Federal and state regulatory boards are packed with industry officials with only a token, and usually very weak, consumer advocate here and there. The deal is rigged.

He is right. Let’s get the feel of how this works in the following admittedly hypothetical conversation between a lobbyist for a taxpayer and either a congressperson or his/her staff. “My client has a problem with the IRS, Mr. Congressperson, so how about calling the IRS Commissioner in to testify before your committee and threaten him with cuts in his agency’s budget if his auditors don’t back off their position on (for instance) my client’s calculation of bonus depreciation for the taxable year. It could mean millions in tax savings to my client, and not to insist upon a quid pro quo, but I will remind you that the PAC to which my client contributes gave your campaign $50,000.00 in the runup to the last election.” Could such a conversation or something like it happen in congressional back rooms? You be the judge.

So where are we?  Are we going to continue to watch the superrich and corporate culture pervert our tax laws to their own advantage while we pay their taxes and meekly submit to their total control of our lives and that of our progeny in some sort of surrealistic lord-vassal new feudalism?  I hope not.  Are we going to finally recognize that inequality is not synonymous with poverty but about the distribution of resources and that government has a big say in how such resources are to be distributed? I hope so.

The ultimate question is philosophical: Do we treasure our democracy enough to save it?     GERALD    E


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