12 April 2013

Michael Hudson: Obama's Cat Food Social Security Budget Strategy and Stealth Tax Increases

What some of the 'conservatives' have figured out is that 'chained CPI' is also a threat to those who rely on incomes.

The chained CPI would also apply to the income tax brackets, to adjust for 'inflation creep.'

By seriously understating inflation, the chained CPI would also result in steady, hidden tax increases on non-privileged income by allowing inflation to push income levels higher without adjusting tax brackets.

Remember how the AMT was originally pitched as a way of forcing the wealthy to pay taxes despite loopholes, and instead became a snare for the middle class?

It's a win-win for the crony capitalists and liberal statists.  Because in corporatism the state is the corporation and the corporation is the state.  And it takes care of its own.

Less money for the elderly, and more income taxes from their working children.  And the government can mask their inflation while continuing to deliver wheelbarrows of money to the Wall Street banks and their friends, while providing a blind eye to their tax loopholes and havens.

The oligarchs maintain a tight control on any investment opportunities and returns, driving savings where they like using the power of their exchanges and the Federal Reserve. And it is easy to game when you are included in a stream of privileged information and dark pools of trading.