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Although the nominal US corporate tax rate of 35% seems high, and especially so given all the corporate funded propaganda promoting more tax cuts and givebacks, in fact the realized corporate rates are relatively low both in terms of historical experience and comparable developed countries. This is because of the many loopholes, subsidies, and accounting gimmicks available to its more influential corporate citizens from a corporate friendly government.
One could make the case that the tax burden is falling disproportionately on smaller businesses and individuals that do not have the infrastructure and latitude to take advantage of the loopholes available to the bigger business lobby companies.
State and local taxes appear to be regressive. The top echelons of corporations and private individuals seem to be doing rather well for themselves. When the fortunate complain that the bottom percentiles pay little Federal tax, they overlook how regressive the consumption taxes on gasoline, food, and consumer non-discretionary items fall on those with little income. Even with property taxes, the wealthy often use the guise of 'farms' to avoid a sizable share of their local taxes by raising a few cows or a token crop.
No wonder that the corporate class economists promote increased consumption taxes, and the oligarchs spend millions to persuade the naive that their hell is a heaven.
P.S. 'Like a dog returneth to its vomit,' so a few readers have made comments by email that rely on the efficient market hypothesis, some idealistic and simple model of macroeconomics, and the 'trickle down' theory of economic progress.
There is little more theory than well worn slogans behind this line of argument, and if I ask them about it they don't understand how it fits together. They have little knowledge other than sound bytes they have learned by rote from the corporate media and pundits, and a 'common sense' that is so far removed from reality as to be almost delusional. It reminds me of socio-economic discussions at university, very long ago, with dour faced suburban devotees of Chairman Mao.
To wit, if corporations pay more taxes, they will just raise prices, raising costs for the consumer. So we should reduce their taxes and take the 'savings.' And if the government raises more revenue from corporate taxes, it will reduce economic growth and freedom and waste more money on illegal immigrants, the unfortunate, and greedy old people.
Men do act madly in herds, especially with the right instruction and incentives, but regain their sensibility one at a time, but too often on viewing the wreckage produced by their devices. And this is what makes the herding instinct dangerous. No matter how artful the deceitful shepherd, the madness serves only itself.
Download Ten Charts from Center for American Progress
“The last duty of a central banker is to tell the public the truth.”
Alan Blinder
"When a man has so far corrupted and prostituted the chastity of his mind as to subscribe his professional belief to things he does not believe, he has prepared himself for the commission of every other crime."
Thomas Paine
As the US Federal Reserve System approaches its 100th Anniversary in a few years, and as central banks and their political allies around the world promote the bailout and enrichment of the biggest banks and wealthiest individuals, to be paid for by the impoverishment and sacrifice of the people, it might be well to remember the lessons of history with regard to a fiat currency controlled by private corporations under the guise of an 'independent monetary authority.'
"The paper system being founded on public confidence and having of itself no intrinsic value, it is liable to great and sudden fluctuations, thereby rendering property insecure and the wages of labor unsteady and uncertain.
The corporations which create the paper money can not be relied upon to keep the circulating medium uniform in amount. In times of prosperity, when confidence is high, they are tempted by the prospect of gain or by the influence of those who hope to profit by it to extend their issues of paper beyond the bounds of discretion and the reasonable demands of business; and when these issues have been pushed on from day to day, until public confidence is at length shaken, then a reaction takes place, and they immediately withdraw the credits they have given, suddenly curtail their issues, and produce an unexpected and ruinous contraction of the circulating medium, which is felt by the whole community.
The banks by this means save themselves, and the mischievous consequences of their imprudence or cupidity are visited upon the public. Nor does the evil stop here. These ebbs and flows in the currency and these indiscreet extensions of credit naturally engender a spirit of speculation injurious to the habits and character of the people. We have already seen its effects in the wild spirit of speculation in the public lands and various kinds of stock which within the last year or two seized upon such a multitude of our citizens and threatened to pervade all classes of society and to withdraw their attention from the sober pursuits of honest industry.
It is not by encouraging this spirit that we shall best preserve public virtue and promote the true interests of our country; but if your currency continues as exclusively paper as it now is, it will foster this eager desire to amass wealth without labor; it will multiply the number of dependents on bank accommodations and bank favors; the temptation to obtain money at any sacrifice will become stronger and stronger, and inevitably lead to corruption, which will find its way into your public councils and destroy at no distant day the purity of your Government."
Andrew Jackson, Farewell Address, 1837
Someone asked me again, what is the significance of this inventory decline?
It is not that the world is running out of silver, far from it. There are allegedly 309,738,781 ounces of silver in the SLV Silver Trust. I think the bullion in GLD and SLV is often comprised at least in part by paper swaps and other forms of metal that are not unencumbered bullion.
It is that the amount of silver available for sale, in large quantities and the appropriate forms, is in increasingly short supply, down to record levels AT CURRENT PRICES.
This is significant for two reasons.
Such supply/demand imbalance, in the absence of supply or demand shocks, is often the result of long term artificial price manipulation and external forces in the market that prevent a market clearing price.
Eventually the market imbalance will be resolved, one way or the other.
I am trying to document what is happening and make people aware of it, so that they can't say 'no one knew.'
So let's see what happens.
History will have to record that the greatest tragedy of this period of social transition was not the strident clamor of the bad people, but the appalling silence of the good people."
Martin Luther King, Jr.
Freefall, of a more enjoyable sort
