Guest guest Posted January 13, 2005 Report Share Posted January 13, 2005 Z Tue, 11 Jan 2005 22:19:52 -0800 (PST) Methods of Wealth Transfer Methods of Wealth Transfer by Zoltan Abraham November 28, 2004 Back in the 1950's most of the wealth of our nation was held by the middle-class, who made up the majority of the population. Sounds reasonable, right? Well, not if you're a corporation. Not if you're a super-rich guy who wants even more. So how can all that wealth be transferred from the middle-class to the dirt rich? Let me count the ways! Taxes: When a politician says, " I will cut your taxes, " what do you say? " Hurray! Hurray! Thank you! Thank you! " Most likely. But then the Bush tax cut, for example, primarily benefits those who make $200,000 a year, or more, much more, which is a very small segment of our society. They are paying much less in taxes proportionally than the middle-class and the poor. But, hey, that doesn't matter, as long as I can save a few thousand or hundred dollars a year. Right? Well, no. The reduction in taxes also means a reduction in social services, such as education, road repair, health care coverage, police protection. You will either have to go with less, or you will have to pay out of pocket – which, I can guarantee you, will cost much more than the few thousand or hundred dollars you saved. But won't the rich also be going without these social services? Well, yes, but they have more money to pay out of pocket. They have no problem paying for the best healthcare, the best education for their children. They can afford to live in gated communities, and hire their own guards to protect their homes. Don't worry. They won't be lacking anything. Plus, to the extent that they do enjoy public social services, you can rest assured that they didn't have to pay for them. The middle-class and the poor did. But then, perhaps the easiest way for the rich to increase their wealth is simply not to pay taxes, thanks to tax cuts and a variety of loopholes. The middle-class and the poor will pick up the tab, come April 15. No income tax: The federal government, of course, has an income tax, but some states do not. Cool! Fewer taxes. But, no. When a state doesn't have an income tax, it finds other ways to collect, especially through the sales tax. But the sales tax isn't so bad, is it? The trouble is that the wealthy spend much less of their income proportionally than those who are barely getting by from paycheck to paycheck. So the middle-class and the poor once again pay more in taxes, proportionally, than the rich. Not bad if you a millionaire. But kind of depressing if you're having a hard time buying clothes for your kids and paying for their medications. Corporate tax brakes: In the last 15 years, 65% of American corporations have paid zero taxes. 95% have paid 5% or less, well below the mandatory 35%. Corporations, therefore, barely pay taxes, if at all. No taxes means greater profits – which means more money for the wealthy CEOs, who then in turn pay little to no taxes themselves. But, you might say, is this not illegal? I mean, won't the feds come after you for tax evasion? Oh, but Republicans like to keep government small and weak. Just make sure that the agency prosecuting tax evasion is under-funded and under-staffed. That way they'll never catch up with you. You can commit corporate crimes right outside their windows, and they will not have the resources or the personnel to go after you. That's what I can public service! No more estate tax: The estate tax, renamed by the Republicans as the " death tax, " had the goal of returning to the public at least a portion of the immense fortunes accumulated by the extraordinarily wealthy. The estate tax was not threatening the inheritance of farm owners or small business owners. Instead, it helped to counteract, at least to some extent, the aristocratic stratification of wealth in American society. The elimination of the estate tax, one of the most cherished victories of the Republican Party, has helped to make sure that the rich can keep their wealth untouched for many generations to come. Military spending: Of all global military expenditures, the United States spends 40%. Why does such a small percentage of the world's population need so many weapons? The US already has the capability of wiping all human life off the face of the earth several times over. So why spend so much? Because the corporations associated with the military make an incredible amount of money off of military spending. War: War has several advantages. A lot of weaponry and ammunition get used up, so the government has to buy more – from the corporations profiting the most from the military. Also, deployment of troops and combat require a long list of supplies, which the corporations are all too happy to provide, for a handsome profit. One way to make a killing is through no-bid contracts, which are given to the friends, that is to say, the greatest campaign contributors, of the war-time administration. Requesting bids for a contract is like shopping around; you want to make sure that you get the best for your money. But a no-bid contract simply accepts whatever terms the company in question names, even if the price is outrageous. The company can overcharge for anything, like $60 for a roll of duct-tape. No problem. No questions asked. Another way to cash in is through subcontracting. Remember that clip in Fahrenheit 9/11? If the government pays you $1,000,000 for a certain task, and you subcontract it to a smaller company, paying them only $60,000 for that same task, you make a pretty nice profit. Is this illegal? Is this war-time profiteering? No. It's just good business. Oh, yes. Since it's usually the poor who do the serious combat, war can also kill off a lot of the good-for-nothing riffraff in your society. Thus, you reduce overpopulation, and you bring down the number of people relying on social services. You save. Slash veterans' benefits: If the rank-and-file soldiers do not die, they can become a serious monetary burden, especially if they are wounded. So slash their benefits. Close veterans' hospitals. Refuse treatment when possible. That way, more of the war budget can go toward making the war-friendly corporations rich. The Federal Debt: Why is it good for the federal government to borrow money? Because then we have a federal debt. The federal debt comes with huge interest payments. We're talking hundreds of billions of dollars. Where do the interest payments come from? From the taxpayers. Who do the interest payments go to? To the debt holders. Who are the debt holders? That's a good question. Much of the US debt is owned by foreigners. But is it possible that somehow, in some way, the interest payments on the debt find their way to the coffers of some of the super-rich in our country? Is it possible that the national debt is really a cleverly disguised form of wealth transfer from the middle class to the extraordinarily wealthy of our nation? Just a thought… But there is another good reason for the federal debt. You see, our spending has gotten completely out of control. We cannot maintain all this money being thrown about indefinitely. Sooner or later we must reign things in – and start setting aside some cash to pay off the debt. Which means that we'll have to work on austerity programs. Which means that we have to cut out all the wasteful stuff from our budget. Especially those pesky social programs. We can't afford them anymore! Healthcare, schools, domestic violence prevention – we can't fund that sort of stuff anymore. Of course, such austerity programs cannot impinge on the military budget, because we are still under threat by (name your favorite global evil-doer). Never mind that, as mentioned before, our military spending is already 40% of all military spending in the world, combined. That's barely enough! Technology at public expense: The US has a long history of spending public money to develop new technologies, and then handing each technological achievement over to private corporations, allowing them to reap all of the profits. The railroads, the air travel infrastructure, computers, and the Internet are just some of the examples. The public pays, while corporations get the trademarks, the copyrights, the patents – and the big bucks. Not bad! Bail-outs: When corporations fail or falter through mismanagement or extravagant CEO remuneration, not to worry. The government will often step in to bail them out, using taxpayers' money to help the companies in question get back on their feet. Cool! This way CEO's can go through all sorts of money, knowing that everyday taxpayers' will pick up the slack later. Who said that welfare societies were bad? Public buildings for private profit: Does the following scenario sound familiar? A community raises taxes, often in the face of serious objections, to build a sports field. When construction is complete, the field is handed over to a company or a particularly wealthy individual. The profits then go not to the community, but to the new owner. Thanks, guys! That was so generous. Please keep working hard, to keep corporate welfare chugging along just fine. College loans: Three or four decades ago, a high school diploma was often enough to secure a fairly well-paying job, one which could help you raise a family. You probably know quite a few older men and women who have done pretty well financially over time, but never went to college. However, in today's world, a college diploma is essential for even a moderately well-paying job. Furthermore, in many fields, a simple BA is not sufficient; you need the MA, or even the PhD. But this stuff is expensive. Sure, there are those who get fabulous, full-ride scholarships, but their number is small. Most people have to pay out of pocket. So, if you're not rich, you have to borrow. How much? From $10,000 to about $60,000, or even more, depending on your field, the school, and how far you want to go. Add to that compound interest, and you are looking at paying about twice the amount that you originally borrowed. But not to worry. A good education guarantees that you'll have a high paying job, right? Possibly, if you can get a job in the first place. But a college loan will also guarantee that you'll be paying a good chunk of your paycheck to your lender every month. Not bad for the lender. Of course, the lenders' kids will never have to worry about this sort of stuff. Their families are pretty well off, thanks to you. Subsidized loans: Subsidized loans are cool. After the repayment starts, you can return to school, put the load on hold (if you're enrolled at least half-time), and no interest is collected. That's wonderful! But does that mean that the company lending you the money doesn't get any interest payments? No, that would be unfair. What it means is that federal government picks up the tab, using taxpayers' money. So, don't worry, the lender still gets rich. Thank God! Insurance: Insurance companies love to collect your premiums, but they don't like to pay out money. No, that would be bad for business. So, after you have dutifully paid your premiums for years, if you actually have to ask the company for some coverage, they might just raise your fee. After all, they have to recover the cost of what they paid out to you, so that your previous premiums can just be pure profit. And, if you're too much trouble, if you are too needy, repeatedly applying for coverage, they might just drop you. They like the customers who pay, pay, and pay, but don't actually pester them for money. More roads, more cars: European cities tend to have excellent public transportation systems, allowing people to move to and fro without much hassle, at low cost, often without even needing to own a car. But that's socialism. Here in the States, we are more advanced. Only those weird New Yorkers have the public transportation thing. The rest of the country just builds more roads, which is great business for the companies that make them. Then, to travel on the roads, we buy more cars, which is great for the companies that make them. To fuel our cars, we buy gas, gas, gas! That's wonderful for the tremendously rich oil companies. What is more, car dealers tend to push the big, gas-guzzling vehicles, not the puny little energy efficient ones, which just reek of European socialistic notions. Cool! More oil profits. All these companies might be found lobbying against the creation of an efficient public transportation system. You see, that public transportation business would just crash the great party they're having. So, instead, let's continue with things as they are. Your tax dollars pay for more roads. Your paycheck pays for the car you need – and the gas you also need. And what else do you need to drive your car? Insurance! Which brings us back to premiums… Low pay: Paying employees can really cut into your profit. Plus there are the socialist ideas, such as sick leave, vacation, mandatory holidays, overtime, comp time. Yikes! Does the government not think about your bottom line? I mean, you as an employer have a living to make. In Europe, that den of socialism, the CEO of a company does not make more than about 25 times what his lowest ranking employee makes. But here, in the land of opportunity, a CEO can make over 400 times what the little guy makes. How? You know. For starters, you've gotta cut out ludicrous stuff like vacations, sick time, family leave, and the like. Take away medical benefits. Keep the pay as close to the minimum wage as possible. Lobby like hell against raising the minimum wage. Ensure high turn-over in your workforce, so that employees do not advance to higher pay brackets and do not stick around long enough to unionize. Wage war on unions. Union members are the socialist evil-doers who forced companies to give in to all this bleeding heart stuff in the first place. Fire anyone who tries to organize a union. Yes, that's illegal, but don't worry. First of all, you can always come up with an excuse, like she was five minutes late, or dropped something and broke it. But what is even sweeter is that even if you give no excuse, the feds won't come after you. The agency investigating wrongful union-related firings is so under-funded and slow to work that you have very little to worry about. Also, lobby against the 40-hour work week. The President says it's bad, so it must be bad. Pretty soon, Republicans will have it so employers will no longer have to pay overtime if they force people to work more than 40-hours per week. Way cool! Plus, pay women less than men. Almost everywhere in our country, women routinely make about 75% or less, often much less, of what equally qualified and experienced men make. Let's keep things that way. Less pay, more money in the bank. So, aim high. Keep the profits in focus. To hell with the schmucks who work for you. Outsourcing: The problem with the US is that the minimum wage is far too high. Plus, even after you've cut out all the namby-pamby, socialist, pro-worker stuff you can, there are still far too many labor-related rules and regulations to contend with – like safety standards, and that sort of bleeding-heart, anti-business nonsense. Of course, it's every capitalist's sacred duty to lobby against such prohibitive restrictions. But in the meantime, you still have a business to run and a profit to make. What's the answer? Outsourcing. There are lots of countries in the world that have not been infected with European socialism. Imagine a place where you can set up a factory without environmental regulations, without worker safety standards, without medical benefits, days off, vacation time, overtime pay, and all that. Imagine if you could pay your workers just 23 cents an hour, an extremely low wage even by standards of the poorest countries. Surely, this is paradise. You have died and gone to heaven. But where do you find such a land flowing with milk and honey? Lots of places in the third world, especially Latin America and Asia. In fact, many third-world governments will vie with each other to offer you the best business environment – that is to say, if you grease the pockets of the corrupt leaders a little. A comparatively small payoff at the top, and you've got a country at your disposal. Third-world workers, here we come! Let's hope you don't get sick, or tired, or want to celebrate family occasions, or wish to get away into the mountains for a few days now and then. You'll be much too busy for all that. Give me sixteen hours of your day, every day of the week, every week of the year, and I'll be spending my time jetting around in the Bahamas, enjoying the fruits of your hard work. But, you might ask, why would anyone choose to work under such conditions, when they get far less pay than they need to live on? Easy. Let's just make sure that there is plenty of unemployment in the country. Not hard to do. Just pull the right economic levers, and, bingo, you've got a workforce eager for any work. Come on in. My factory is waiting. Slave labor: How did the American South of the 19th century come by its fabled wealth? Easy – slavery. The trouble with most workers is that you have to pay them. 23 cents an hour can add up after a while. So, don't pay them. Of course, some would say that workers paid no more than a few cents an hour are already slave laborers, but that's just the socialist bleeding-hearts talking. How can you have slave laborers? One of the easiest ways is to force parents to bring their children with them to work. Don't pay the child, and threaten to fire the parents if the child stays home. So you get sixteen hours of unpaid work out of the kid. The parents win because they don't have to worry about childcare while at the factory. Plus, everyone wins because you don't have to spend money on schools. Another way to have slave laborers is to employ illegal aliens in the US. When it comes time to pay them, just call the feds on them, and they'll be deported. They have no legal voice, so you don't have to worry about any ramifications. The stock market: Throughout the 90's the stock market went sky high. The profits were amazing. All Americans were encouraged to invest, not just their extra pennies, but their life savings and their retirement funds. But the party had to come to an end. As the new millennium began, the wealthy CEOs of companies quietly started dumping their stocks. Then, when the big players had safely pulled their money out, stocks started to plummet. The plunge was horrific. People throughout America lost their investments, their savings – lost all their money. But not the CEOs. They laughed all the way to the back, as they say. Was this a conspiracy? No, how could you be so paranoid? It was just bad luck. Fashion: How long do clothes last? One year? Five years? Ten years? Do you ever wear something from a previous decade? If not, why not? Because you look stupid? Who says you look stupid? Oh, the fashion police. Who are the fashion police? The people who make new clothes. If well-made and well cared-for, a lot of clothes could last a long time. But then we wouldn't be giving money to the clothes companies to buy new outfits. Profits would be down. Bad. So why not just make people believe that they must wear the newest clothes, or they'll look like dorks. Or take this example. A couple of decades ago, women in Eastern Europe tended not to wear bras. Sometimes they did, but often they did not – not because they were morally depraved, but because they usually felt no need for them. Today, after over ten years of Western presence in Eastern Europe, women wear bras. Why? Because bras are big business. Make them fashionable, and the money starts rolling in. Defrauding Women: Women are officially working now. They have been doing the bulk of the work of civilization since the dawn of humanity, but now it's official. They are actually working. That's good. Except now you have to pay them. That's bad. Even if you give them less than half of what an equally qualified and experienced man makes, that's still money they get to keep. How can you get all that green stuff back from them? Let's look at just two strategies. 1) No child care: Now that women are often outside the home, working full-time, they need someone to watch their kids. Will husbands do it? Probably not, especially if they are working. Will relatives do it? Possibly, if they are available, but chances are, they are not. So what about an affordable, universal child care system, underwritten with federal funding, that would make it possible for any woman to have someone watch her child when necessary. Oh, but that would be another one of those wild-eyed ideas. That socialism thing again. Yikes! Instead, let's keep child care private and expensive. That way, if a mother wants to earn money, she can give it right back, to pay for others to watch her kids while she's working. Excellent! 2) Clothes: Here is that fashion thing again. Men have to spend a lot of money on clothes to remain fashionable. But women all the more so. A man can wear the same suit, slacks, sweater, or whatever, over and over again. But a woman must have a much more variable wardrobe to display at work. Otherwise she might be considered slovenly. Bad for her career! So, spend, spend, spend. Subscriptions: What are some of the services you to? Phone? Cell-phone? Internet? Cable? Let's say you pay $70 per month for cable; $50, for Internet; and $80 for phone and cell-phone combined. That's $200 a month, and $2400 a year. Wow! Do you take home at least $2400 every month? Of course, these are essential services, which you couldn't live without. They might be. But the bottom line is that you are paying perhaps as much as one whole month's paycheck toward your subscriptions every year. Or, even if you make far more than $2400 a month, you might be paying half of one whole month's paycheck for your subscriptions. That's a lot, no matter how you look at it. Christmas: I love Christmas. But let's face it. We have gone nuts with this holiday. Many, many households spend far more on Christmas than they can afford. They might save up during the year and then splurge. They might take out credit card debt and then spend the rest of the year struggling to pay it off. But it's worth it, isn't it? So what if people forget what you gave them by Valentine's Day? That's over a month of joy you've given them! Eating and Dieting: Our society is saturated with high calorie foods. If you are forced to eat out often, as you might be if you have a busy life, it is very difficult to find meals that do not make you fat. Americans are becoming overweight at an alarming rate. At the same time, a nonstop barrage of media messages tells us that we must be as fit as an Olympic athlete. So what's the solution? Many companies are more than happy to sell you low cal food for an extra penny or two. Or expensive dietary products. Not to mention the bonanza for the health clubs where people can attempt to work off the extra calories. The obesity epidemic is not bad. It's great business for the people who sell the food – and for those who sell slim-down products and services. Drug costs: Drug companies have some of the most fabulous profit margins in the United States. We're talking up to 23%. So how come people are not up at arms about the high cost of medications? Easy, just convince them that pharmaceutical companies need all this extra profit to do research for future drugs. Never mind that these immense profit margins come after the cost of research has been factored in. Shush! Don't let the public find out! Buy and be happy: What could be worse than having a population content with themselves and with the things they have? I mean, these people wouldn't buy anything! What we need is an all-out assault of advertising telling everyone that they are no good, cannot be good – until they buy our product! You are not fit for this world without the newest car. Your home is worthless without the latest dishwasher. You will never have a good relationship without these clothes. Buy my product and be happy. Of course, the beauty of this approach is that they'll never be happy with just that product. But now that they are conditioned to seek their happiness in shopping, they'll be back for more. The cycle continues, and the merchants make out like bandits. Built-in Obsolescence: The above principle is good, excellent, in fact. But there are those who are not swayed by it. There are those people in America who want to hold on to a product for several years, perhaps even decades. They do not realize the financial damage they are causing to corporations! But even these diehards can be dealt with. What's the secret? Built-in obsolescence. Make a product so that it can last only for just a few years. Then they'll have to buy the new thing. Forget the old " built-to-last " motto. That was in the years when merchants obviously were not interested in making money. Changes in technology come in handy too. Just when you have finally mastered the latest software, the latest gadget, the latest computer – voila, it's obsolete. Buy the next one. And if you think that you're VHS tape collection is pretty complete? Here come the DVDs – then, after them, whatever is next. But first you'll have the chance to create an extensive DVD library. Why not force people to buy the same movie at least once a decade! The same goes for music of course. Records, tapes, CDs, MP3 players. Cool! Credit: Getting people to buy is good. But what's even better is to get them to buy stuff they can't afford. Give'em plenty of credit! Send credit offers even to two-year-olds. They'll be paying for the product, plus for the interest on the credit, so, all-in-all, you can get them to pay much more than they had bargained for. Sometimes much, much more. And if they can't make the payments? All the better. They'll have bad credit, which means that their credit rate will be even higher in the future. So they'll be forced to pay an even higher percentage. Conclusion: Whew! Well, this has been quite a trip. Now you can see how corporate America has solved the problem of too much middle-class wealth in this nation. In just fifty years, they've made off with most of the wealth of the middle-class. Not bad! But the game is not over yet. Zoltan Abraham http://home.earthlink.net/~zastar/index.html progressive/ Kill your television! 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