Why “Tax the Rich” Is Bogus

Andy Snyder|August 3, 2021

Here comes the spending.

Those fine folks in Washington are about to “boost” the economy one more time by spending money they don’t have.

They say it will build roads, bridges and rails and bring high-speed internet across the nation.

It will.

It’ll also grow state agencies, build fancy new homes for industry executives… and, of course, buy some precious votes.

But, golly, how are we going to pay for it all? Does the Fed need to buy yet another printing press?

Ah… this is the good part.

The accountants in the crowd will wince. The deficit hawks will cry. And the curious will wonder just how bad the winters are in Canada.

The truth is, Congress has yet to figure that part out.

It assumes the infrastructure improvements will be so grand and economy-boosting that they’ll pay for themselves through future tax revenue.

So far, the biggest source of penciled-in funding – a mere $250 billion – will come from shuffling COVID-19 relief funds from one account to the next. We printed so much money last year that it couldn’t all get spent.

Another $50 billion will come from “recouping” money fraudulently paid in unemployment benefits last year.

$50 billion… in fraud. And that’s only what they’ll get back.

Another $30 billion will come from tightening tax-reporting requirements. You know… on things like crypto and online sales tax.

We suppose we should cheer the fact that there’s no new tax scheme in the works. Washington has yet to tax each stroke of our keyboard or every breath we take.

Instead, it’s shrugging its shoulders, knowing debt is cheap and the printing press is already warmed up.

Let the next guy figure it all out.

But we can’t help but wonder if somebody hasn’t slipped the folks in Congress a napkin with a bit of math on it. If they crunched just a few numbers, they’d know we’re past the point of paying for their spending.

The numbers no longer add up. Not by a long shot.

Steal It All?

The mantra these days is simple. You’ve heard it.

“Tax the rich.”

But it’s not the somewhat-rich that folks are after… It’s the super-rich – those greedy buggers who keep going into space.

Surely they can spare a dime to pay for all this.

Ha.

Here’s the deal. The nation has roughly 650 billionaires right now. They had a heck of a year last year. Collectively, they added a trillion bucks to their wealth.

Great.

Pulling all their assets together, they’re worth a combined $4 trillion.

We could soak Gates, Bezos, Buffett and the boys who built this economy totally dry, leaving them penniless… and Washington would still be short of its annual outlay by nearly $3 trillion.

That’s a problem.

It makes it quite clear who will really pay for all this. It will be us… the next guy… and our grandkids.

Know this… For all the talk this year of closing tax loopholes, taxing the rich and Washington “getting what it’s owed,” none of it has a basis in reality. It’s all hot air.

The folks on Capitol Hill have no plans of even trying to level the keel.

Worse, rumor has it that this $1 trillion package contains only the easy stuff. There’s a $3.5 trillion “soft infrastructure” pitch coming later this year.

How are we going to pay for it?

Easy. Fake money, massive debt and, the best collateral of all, our future.

What does it mean for investors?

It’s more of the same – a dollar that’s waning in value, ultra-low interest rates and bubbles floating in the sky.

Bottom line… Washington needs more than it has.

That means you do too.