Absolutely.

What would they be saving their billions for anyhow: for another Ice Age?

Originally written by John Bunch on October 4, 2009 7:42 AM As reported in CNN today, almost half of all Americans (the lower half of wage earners) will pay ZERO income tax to the federal government for 2009. Meanwhile, the richest 1 % of Americans pays for 38 % of all taxes collected by the federal government. ... further reinforcing the fact that far from being a country where it is bad to be poor, and good to be rich, it ain't so. (you will NOT see this stat in the new Michael Moore movie, either).

Just some fancy packaging and accounting wizardry, spiced with tonnes of sophisticated bunkum.

The government would have to get that forsaken cash from somewhere else, and where? Countries all over the world have introduced and increased this so called "goods and services tax" which taxes you whether you have an income or none, whether you are rich or poor, and whether you stay at home or you step out of your home. More efficient and more loophole-proof, isn't it?

Why, because the rich companies and individuals can choose to site their business, factories, and investments in countries with low taxation on fabulous profits, and the governments need to find another way to tax by spreading the tax net wider, not narrower.

Originally written by John Bunch on October 4, 2009 12:42 AM  ... almost half of all Americans (the lower half of wage earners) will pay ZERO income tax to the federal government for 2009. Meanwhile, the richest 1 % of Americans pays for 38 % of all taxes collected by the federal government. ...further reinforcing the fact that far from being a country where it is bad to be poor, and good to be rich, it ain't so.

Hmnnn...

Back in the good old days when I lived in the land of milk and honey, I knew a NYC/Princeton Old World family money person, who, in order to reduce her considerable taxes, was told by her various accountants to spend more money.

And so she did: at Barneys and Takashimaya and...in Venice where she purchased the most breathtakingly beautiful glasses I have ever laid eyes on...gawd.

Nanna

Originally written by John Bunch on October 5, 2009 1:13 AM That was probably back when the top tax rate in the U.S. was 80 %. That results in social stratification. Reagan changed all that in 1981, reducing the top tax rate from 80 % to 37 %, and that resulted in the biggest boom in world history.

It would be a never ending game. The US had Reagan and the UK had Thatcher.

From the early 1980s to today, UK corporate tax rate fell from 52% to today's 28% while the VAT increased in tandem from 8% to today's 17.5% in 3 steps.

From the early 1980s to today, Singapore's corporate tax rate fell from 40% to today's 18% while the GST increased from 0% to today;s 7% in 3 steps.

This is repeated all over the world.

Maybe, one of these days, we would have 0% income tax with the consumption tax shooting up to make up for lost revenue, just when we are retiring we no income but continue to spend lavishly?

Someone is running a competitive thread at http://www.motherjones.com/kevin-drum/2009/09/meltdown-list:

Off the top of my head, here's a list of the various things people have blamed for last year's economic meltdown:

1. Housing bubble
2. Mortgage securitization mania
3. Massive growth of complex credit derivatives
4. Mortgage fraud, growth of NINJA/liar/HELOC/option ARM/etc.
5. Asian savings glut
6. Long-term current account imbalances
7. Ratings agency flimflam
8. 2007-08 oil shock
9. Overuse of leverage on Wall Street
10. Easy money policy from Fed
11. Reliance on bad risk models (VaR, CAPM, etc.) that led to consistent undervaluation of risk
12. Too much debt (both household and financial sector)
13. Government efforts to increase homeownership
14. Repeal of Glass-Steagall

 

I don't have any particular agenda here.  I'm just collecting reasons, and obviously there's quite a bit of overlap on this list already.  But I'm still looking for more!  If I'm missing anything that a significant number of people think had a significant effect, please leave it in comments.

UPDATE: Added from comments:

15. Pay practices that provided incentives for risky behavior
16. Greenspan/Bernanke put (i.e., the widespread belief that the Fed would bail out any big bank that failed)
17. Inadequate regulation of shadow banking sector
18. Poor bank capitalization regulations that allowed too much off-balance-sheet risk

For the good of the U.S. economy....hahahahahahahahaha...you think?

--------

Report on Bailouts Says Treasury Misled Public

Published: October 5, 2009

WASHINGTON — The inspector general who oversees the government’s bailout of the banking system is criticizing the Treasury Department for some misleading public statements last fall and raising the possibility that it had unfairly disbursed money to the biggest banks.

A Treasury official made incorrect statements about the health of the nation’s biggest banks even as the government was doling out billions of dollars in aid, according to a report on the Troubled Asset Relief Program to be released on Monday by the special inspector general, Neil M. Barofsky.

The report also provides new insight into the way the Treasury allocated billions of dollars to nine of Wall Street’s largest players. The report says that Bank of America appeared to qualify for more aid earlier, under the government plan. That assertion adds another element of intrigue to continuing investigations of the bank’s merger with Merrill Lynch and the role that regulators played in the deal, even as Merrill’s condition deteriorated....

[…]

Former Treasury Secretary Henry M. Paulson Jr., for instance, said on Oct. 14 that the banks were “healthy,” and that they accepted the money for “the good of the U.S. economy.”…

http://www.nytimes.com/2009/10/05/business/economy/05bank.html?em

Originally written by Nanna Mercer on October 6, 2009 10:50 AM For the good of the U.S. economy....hahahahahahahahaha...you think?

For the good of "customers, employees, owners and society." How about that? From an interview with Deutsche Bank CEO Ackermann:

SPIEGEL: How about Deutsche Bank? You have also sold billions of euros worth of junk bonds.

Ackermann: Much of what is called junk bonds today was not necessarily bad. During the crisis, demand dropped precipitously, also for many essentially good products, with a corresponding decline in prices. If you have to sell your Picasso collection, but there are no or hardly any buyers, even the most beautiful painting is not worth much anymore. But does that make it junk?

SPIEGEL: The banks probably had more junk than Picassos in their collection.

Ackermann: Given the dimensions of the global financial markets, there were only relatively few cases where the substance of the products themselves was not good. But these products have dragged down many others.

SPIEGEL: Why did the banks ignore all the warnings, such as the growing real estate crisis in the US?

Ackermann: It is very difficult to recognize bubbles in advance. At what point do rising prices constitute a bubble? If you sell off too quickly, you lose earnings and may soon no longer be in business. If you react too late, you suffer large losses. There would be no banking industry without risks....

A bank's mission is to create the financial conditions for growth and prosperity, and fulfill as best as possible the diverse needs of customers, employees, owners and society.

http://www.spiegel.de/international/business/0,1518,653233,00.html