Chapter 49 - How to Favor the Rich

Avoid Taxing Hoarded Money

Hoarded Money sits in bank accounts for months or years on end. This money is held stagnant by persons with ‘more money than they can spend’. These people do not need to borrow as they have unutilized money. They know exactly how much money they have at any given time and they put a lot of effort into retaining that money and increasing its volume. For a hoarder to increase their hoard requires:

The holding of this Hoarded Money becomes competitive. These people are wise to the methods of increasing their hoards. They become politically adept at applying pressure to reduce tax on anything that affects their hoards or additions to their hoards. Tax then becomes biased away from both Hoarded Money and money that has the potential to become hoarded. Thus there is no transaction tax other than on consumer goods and everyday services. Income taxes fall mainly on personal ‘sweat and toil’. Unearned income gets a very soft touch. There is no Wealth Tax, no Inheritance Tax, no Death Tax, and no Financial Transaction Tax.

This competitive hoarding causes a range of problems:

Low velocity is a serious economic problem.

New Messiah says: “Do not allow money to become hoarded.”

To favor the rich:

Avoid Taxing Investment Transactions

If one buys a gold plated audio cable, one pays Sales Tax. If one buys gold paint, one pays Sales Tax. If one buys gold, one pays no tax. If one buys shares in a gold mine, one pays no tax.

We have a system where a person spending money to make money pays no tax. The act of ‘making money from money’ is a distortion of the money system. One of our ancestors invented the money system so that humans could trade with each other. Money was invented to enable trade. It is an error of economics to describe money as a ‘store of value’, partly because it impedes the ability of money to ‘act as money’ and partly because it never can be a ‘store of value’ for any longer than a short time. Any storage of money for longer than a short time requires new money to be injected, whence the saved money only dilutes the pool of Circulating Money when it returns to circulation. An equal amount of money must be removed or brought into hibernation if dilution is not to occur.

The act of ‘making money from money’ has the effect of reducing the volume of the circulating medium that is actually circulating. Circulating Money moves comparatively rapidly from person to person and so is comparatively easy to syphon. Hoarded Money, on the other hand, is held by people with ‘more money than they can spend’. Hoarded Money is difficult to remove because:

New Messiah says: “Hoarded Money remains hoarded.”

The effect is that we are not removing money from those that are abusing money by removing it from circulation. Money that does not circulate is beyond useless to society. I say beyond useless because it has the potential to be rapidly spent into society in the event of a shock to the money system. The cascade of Hoarded Money into circulation is the cascade stage of hyperinflation. By not taxing Investment Transactions we are encouraging activities that are detrimental to the successful operation of a national money system. The money of a nation was not created to be hoarded. Why create money, if it is to be hoarded. The one thing that should never be allowed with a national money system is hoarding. There is no point creating money for individuals to hoard.

New Messiah says: “Do not hoard money.”

When investment transactions remain untaxed, a huge potential source of government revenue is ignored. This requires more tax to be extracted from Circulating Money. This is mostly collected as Sales Tax or Income Tax, both of which are impediments to trade in the real economy. The nation finishes up with a tax regime that

The solution here is to implement a general ‘no exceptions’ Transactions Tax. The current rate of Sales Tax is of the order of ten to twenty percent. The current rate on income transactions and on corporations is of the order of twenty to fifty percent. An ‘all encompassing’ Transactions Tax would probably be around one tenth of one percent. ($1 in $1000) This is a very very low tax rate. Sales Tax would thus be reduced from say ten percent to 0.1%. A purchase of $1000 would currently attract a tax of $100. This would reduce to $1 under a Transaction Tax regime, financial transactions that were previously exempt would now attract a one dollar in a thousand tax.

A diagram comparing Transaction Tax 0.1%, Sales Tax 10% and Income Tax 30%. Creative Commons Attribute - Andy Chalkley.

A 0.1% tax would almost be invisible. It is far less than some private transaction fees such as credit card fees and brokerage fees. When one purchases items with a credit card, one pays a hidden transaction fee of somewhere between one and three percent. When one purchases a house one pays agents fees. When I pay my phone bill online, they tried to charge me a payment fee. When one purchases shares, one pays transaction fees to a broker.

A problem with a Transactions Tax might be that too much tax is collected. Sufficient could be collected to enable a dramatic reduction in Income Tax for individuals and other economy-damaging taxes.

Punitive Taxation of Income for Expanding Businesses

When one earns money through personal sweat and toil one is taxed rigorously and rapidly. When one runs a small, medium business, tax is rigorous and immediate. If it is an expanding business that is purchasing fresh production equipment, one is taxed in a complex manner that does not allow a deduction for the money spent on the recently acquired equipment. Thus one suffers a greater tax burden when the business is expanding. Under a bizarre twist of logic, the tax deduction is deferred to a later date and the new assets are treated as ‘profit’. In effect, the assets that are required to increase production are treated as ‘income’. What is termed as an ‘Income Tax’ is actually a ‘Profit Tax’ calculated in a strange manner that inhibits expansion. A world army of accountants cannot see their error. The whole topic is covered as ‘depreciation of assets’. The asset is evaluated on an annual basis and its estimated value is included in the accounts each year. Generally, the asset is expected to change value by a percentage each annum depending on its expected ‘life’. But not all assets are treated in this manner. If one buys an asset such as a house, land, farm, or factory, for the purpose of gaining from its change in value, one escapes this tedious annual calculation. One keeps the tax that one should pay annually on the asset appreciation. If one keeps the asset indefinitely, the tax is deferred indefinitely. We have developed a situation where those operating in the real economy that feeds, clothes, entertains, and houses us pays tax influenced by a change in value of assets in a manner to punish expansion, whilst those who seek to ‘make money from money’ avoid such tax indefinitely.

The same occurs with trading stock. The accountants treat the purchased goods as an asset not an expense, yet no income is made until the goods are sold. This heavily discourages business expansion.

The nature of the punitive depreciation arrangements means that expanding businesses are short of money and need to scurry to the moneylenders. Thus the money lender makes money from expanding and profitable businesses whilst at the same time putting a brake on the real economy and encouraging money to move to moneylenders. If the expanding business is a company, the entity is encouraged to sell ownership through share issues to obtain the funds to expand. The share owners then take a portion of all productive businesses without the day to day stress of operating the business. The money to purchase such shares tends to come from the idle money in society owned by those who have accumulated ‘more money than they can spend’.

The solution here is that depreciation should be abandoned or relaxed. A business should be able to defer tax by adjustment of depreciation rates. The calculations are at present deceptive. Under a depreciation regime, tax is a Profit Tax because the total asset value of the business is taken into account. Without depreciation, the calculation is more reflective of the income of the business. For a small business, this is more reflective of the money the owner had over the year to feed the family. Thus two figures are achieved. One is the profit for the year which includes the estimated real value of the assets and secondly, there is a figure for the income from the business. This income is the money that was removed from the business for upkeep and feeding of the family. Profit of the business is effectively the money taken from the business for personal use plus the increase in the value of the assets of the business. Interestingly, the potential selling price of the business is rightfully not included.

To favor the rich:

Allow Corporations to Offshore Their Profit to Avoid Tax

Allow corporations to use overseas tax havens to place their holdings. This enables them to avoid taxation. By this and other means, many companies have an effective tax rate of zero percent, some even manage to get money back. These companies are effectively using the facilities of the nation, including, roads, bridges, ports, water, and schools to train the staff, without paying for them. We can call this “Corporate Welfare”

To favor the rich:

Avoid Taxing Speculative Gains

Persons with excess money often purchase assets with the express intention of making money from the appreciation of the asset. Real estate in areas where there are dying industries, tends to have almost no value, whilst real estate in areas with high employment tend to have high and increasing values. Taxation on these persons with ‘excess money’ tends to be lenient. The appreciation of the asset is not taxed until the asset is sold. If the asset is held indefinitely, the tax is delayed indefinitely. Thus the asset owner has become wealthy without paying tax on his (her) wealth. There is yet another distortion in this arrangement. When a house if purchased under such arrangement, the interest on any mortgage is tax deductible at that person’s top tax rate. This could mean that the government is subsidizing the interest on the purchase to the extent of 50%. The government forgoes tax revenue of many thousands to benefit of those whose sole intention is to ‘make money from money’. A person who intends to purchase for the purpose of raising a family does not get this subsidy through the tax system. The effect is that those with a tax subsidy on mortgages can outbid regular wage earners on auction day. There is then a significant increase in the population in unstable living arrangements leading to a degradation of society. These ‘renters’ are on the street after a failure to pay rent. They have less feeling of ‘ownership’ of the nation. The lack of stability in their living arrangements leads to all manner of social issues all causing greater expense for the government. The lack of ownership means that they need government support when their useful working life has ended.

To favor the rich:

Put Loopholes in the Tax Law

The task here is to make the Income Tax laws complex so that only extremely clever people can find the loop-holes. With appropriate wording, those with a high income and a high wealth, will afford clever tax accountants to utilize the loopholes and intimidate the tax collectors into submission. When done well, the high-income earners will pay a lower tax rate than the poor.

Cynical persons might say that the Income Tax system was set up so that rich people could avoid paying Income Tax. The tax regime cleverly avoids taxing accumulated wealth and an easily avoidable Income Tax enable the wealthy to increase their hoards with ease.

(Income Tax arrived when central banks arrived. Governments ceased to create the money of the nation. Governments borrowed the money of the nation. Income Tax was collected so that interest could be paid by the government.)

Implement a Payroll Tax

Payroll Tax is a tax on the payroll of businesses. As such, it is a tax that is not seen by employees but is directly related to the employment of employees. It is a tax on the time-based sweat and toil of citizens. Persons that have ‘unearned income’ escape this tax. Unearned income includes rental income and interest income. These incomes do not involve time-based sweat and toil. Time-based sweat and toil attracts Income Tax and Payroll Tax. Unearned income only attracts Income Tax and the rich can usually circumvent Income Tax.

Warren Buffett

“The capital gains tax is 15 percent now. So I sit there in my office and I make a lot of money by capital gains, and I pay 15 percent, and I pay no payroll tax on it.”

John F. Kerry (mentions circulation and hoarding.)

“I think it’s time we had a President who will provide the only real economic security: good jobs. A President who will provide middle class payroll tax relief to get money in the pockets of workers who will spend it, not more tax giveaways for those at the top to stimulate the economy in the Cayman Islands and Bermuda. A President who will index the minimum wage to inflation and raise it from a 30 year low, not increase the tax burden on the middle class and those struggling to join it.”

(Did you see the reference to circulation and hoarding.)

Mark Zandi

“The extension and expansion of the payroll tax holidays for workers would be number one on my list and key to avoiding recession.”

Jared Bernstein

“Did folks know that the tax to fund the program [Social Security] only hits salaries up to $110,000? That means that if you make a million bucks, about 90% of your salary is tax free when it comes to the payroll tax that funds Soc Sec. That ain’t right.”


To favor the rich, it is necessary to allow foreigners to manipulate national currencies on Forex. Forex is short for Foreign Exchange Market. Approximately eighty percent of transactions on Forex have nothing to do with the trade of goods or services. Twenty percent of Forex transactions are genuine transactions where currencies are exchanged because goods or services are moved from country to country. Speculators use Forex in a form of posh betting against countries. This is clearly an attempt to ‘make money from money’ and is thus a form of evil. The small speculators are less of a worry than the large time speculators. The large time speculators can move so much money that they can influence a nation’s exchange rate. A country tends to correct the exchange rate by spending reserves to prop up the currency. The large time speculator can make windfall profits at the expense of a nation. These people should be treated as financial terrorists. Jesus was nailed to a scaffold because he objected to the manipulation of exchange rates.

New Messiah says: “Speculation in exchange is the work of mammon.”

Mammon is intended to mean the pursuit of money, personal wealth, and is associated with the greedy pursuit of gain or “deceitful riches”. Mammon has a negative connotation. Mammon is the personification of all lusts and excesses including greed, dishonesty, gluttony, and a lust for worldly gain. Mammon can be considered as an idol of materialism. Mammon is associated with money, wealth, and riches. Mammon refers to the seduction of humanity to selfish wealth and inappropriate behavior.

Mammon livving for money. Creative Commons Attribute - Andy Chalkley.

In the Sermon on the Mount, Jesus teaches about our relationship to material goods. He says:

“Do not store up for yourselves treasures on earth, where moths and vermin destroy... But store up for yourselves treasures in heaven, ... For where your treasure is, there your heart will be also.

“The eye is the lamp of the body. If your eyes are generous, your whole body will be full of light. But if your eyes are stingy, your whole body will be full of darkness. If then the light within you is darkness, how great is that darkness!

“No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and mammon.” [Matthew 6:19-24]

Apostle Paul writes of the godly perspective toward Mammon:

“Godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it. But if we have food and clothing, we will be content with that. Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.” [Timothy 6: 6-10]

Solomon writes of the futility of chasing after mammon :

“Whoever loves money never has enough; whoever loves wealth is never satisfied with their income. This too is meaningless.” [Old Testament: Ecclesiastes 5:10. Solomon circa 970 to 931 BCE.]

New Messiah says: “Do not unwittingly make mammon your god.”

Enforce a Slush Fund for Corporations

This comparatively easy measure occurs when a country sets up a superannuation scheme. Proceeds of the superannuation scheme are invested in shares in companies and corporations. No money is funneled to the small business area which is the backbone of the real economy. Never forget that money is a freely created commodity and that businesses need money before they can make money. The government has the authority to create the money of the nation, but rarely does. It obtains money, not by creating it as debt free money, but by borrowing it. Even when the government creates the money, it does not make quantities of it available for use by prospective businesses. The only avenue for businesses to obtain money is through the private banking system. These private banks lend for profit. Public Banks lend for the purpose of expanding the economy. They lend for their benefit rather than the for the benefit of the people.

Allow Lobbyists

Lobbyists tend to be well funded and are a useful source of funds for politicians seeking election funds. This gives them significant direct power as well as the indirect power of ‘teaching’ the politicians all the items they need to ‘know’ to survive. Just as doctors become influenced by the agents of the pharma industry, the politicians become ‘educated’ by the lobbyists.

When countries were ruled by monarchs, there was a problem for the moneylenders. The king knew that he had the sovereign right to create the money of the nation. If the king borrowed money, there was a problem when the king died. Did the new king accept the debts of the old king or did he say “Off with their heads. They should not be lending money. It says so in the bible.” The solution was to remove the king’s head or remove the king’s power. This is accomplished by means of a revolution. A core group of ‘instigators’ (nasties) drums up support from any available idealistic group who are used as ‘useful idiots’. Agents are put into positions to encourage the king into debt by foul means or fair. A foreign war is an appropriate incentive for the king to get into debt. Nations are encouraged into war by the ‘Mister Bigs’ of the Nasties. Taxes are raised in areas that cause hardship to the people. Pamphleteering by the revolutionaries turns the people against the king. The king is deposed by what is considered to be a ‘popular’ revolution carried out by the useful idiots backed by the more ruthless ‘nasties’. In the turmoil after the so-called ‘popular’ revolution, a second minor revolution occurs where the ‘nasties’ take over from the ‘idealistic useful idiots’. Anyone that is a threat to the control by the ‘nasties’ is beheaded, jailed, killed, or denounced. This includes most of the ‘idealistic useful idiots’. When the dust settles and some normality to life returns, the debts of the nation can be hung on the people as an entirety. The method is to enforce a democracy and give the people a vote. It is useful to give the people the vote so that the debt can be hung on the people who pay the interest through tax collectors. A tax department is set up as bag men for the nasties. The people are thus liable for the debts of the nation through a well-constructed tax regime built specifically to bleed the public for the benefit of the wealth nasties. The next task is to ensure that there are only two political parties with quite different policies except for two. The parties both support the debt banking system and every war that is advertised by the media. People are encouraged to vote for party A or party B both of which support debt banking and war. The parties never do what they say and get thrown out each eight years whence the party that was thrown out eight years previously for incompetence is re-elected by a gullible public.

U.S. Bombs Dropped in 2016 [2]
(All Weapons Platforms)
BombsPredominant Religion
Syria12 192Muslim
Iraq12 095Muslim
Total26 171Muslim

The media gets its news from plutocrat-financed ‘think tanks’. The media plays an important role in setting the two parties against each other to divide the nation. The nation divides into two and argues which is the appropriate party without considering that they both support a debt banking system and every war that is advertised on the controlled media. Both political parties support the debt banking system which ensnares all citizens in a web of debt. Wars are carefully timed so that they do not appear in electioneering.

The lobbyists are not evil people as they actually believe they are acting in the interests of the nation. They actually believe that the banks are best at control and issue of credit. Even though banks rarely manage to maintain a consistent Money Supply due to their erratic lending practices. Even when they fail, the fault is laid at the feet of the government with claims of economic mismanagement and failure to balance an unbalance able budget. National assets are sold of to pay the unpayable interest. Asset striping continues until the process is complete.

Give Corporations Free Money

The U.S. government annually gives large sums of taxpayer’s money to corporations as ‘corporate subsidies’. The reasoning is given that this is designed to encourage innovation and incentivize research and development. This sounds noble but it leads to a form of corporate welfare, where companies take large sums of free money. This is often used to boost earnings rather than boost research and development.