The Bubble

Sweet Crude Oil appears to be settling in at $53/barrel--Why? Greenspan calls for a switch to a combination Income and Consumption Tax--Why? George W. Bush wants Private Accounts for Social Security--Why? Everyone talks about Tax Reform to encourage investment--Why?

It stands as obvious that the price of Oil is being driven by heavy institutional Fund money to generate artificial Profit-taking. No need to mention Fund Managers already have too much money to throw around, and it remains money which is not theirs in ownership. Actual ownership of the monies resides within Those who must pay the arrtificially high prices for Fuel. A pitiful mention states Fund profits will be down this year.

Federal Tax law has been on the side of the Investor since the mid-1970s. We have 401(k)s, IRAs, Koughs, and various Business tax credits for investment. We have a mortgage credit for Home Buyers. We have a Corporate Income Tax law which allows basic Accounting Fraud achieving an effective Income spread over 24 years, takes a Recapitalization Expense allowance for Equipment purchased in the same Year in which a Capital investment credit was exercised--this while the Equipment had not even been delivered as yet within the Tax year, and says that Stock Options granted do not even have to be accounted. No one need pay Taxes until they realize the Income (spend it), as they can roll it over as Investments.

The foregoing does not apply to Labor, though, unless they receive Pay sufficient to devote an extremely large percentage of their Income to One of the defrayed Tax instruments. The Bush Private Accounts for Social Security find design in attempts to nullify Benefits earned by Labor, and paid for by taxation of Labor. The humor comes from the fact Labor is expected to lose these Benefits through paying further taxation to a 'Private Account' controlled by the Government, and used by the Government by complex schedule to minimize the Benefits currently guaranteed. All funds to be utilized by Fund Managers to incite artificially high prices for basic Necessities, which Alan Greenspan wants to specifically tax because of Labor's consumption.

Any Consumption tax which displaced the Income tax would increase Labor and the Poor's real tax base by over 50%, while cutting the upper Tenth percentile of Income's taxation by at least two-thirds. Elimination of the Capital Gains Tax will have actually cut their taxable Income in half, if the Bush initiative is enacted. Any mixture of Consumption Tax and Income Tax will increase the Poor's and Labor's taxable Income by at least 20%, while cutting the Wealthy's taxable Income by at least 30%.

American Labor should be worried; the combination of a Bush administration and a Republican Congress intends to rewrite the Status Quo. They intend to eliminate the Welfare practices introduced since FDR, leaving American Labor as bereft of safety as they were at the end of the First World War. The American Worker will have to pay for his own Social Security out of his own Pay, never sharing in the Profitability of the Enterprises for which he works. He must pay now for half of his Pension, and the Republican Congress works hard to see he will have to pay all from his own Wages--such marginalized by artificial suppression. Medicare and Medicaid will die, because Business and Wealth will define them as too costly. The only Welfare allowed will be for Business, and the Rich and Privileged. lgl