Saturday, September 6, 2008

Abolish the Federal Reserve Central Bank: Declaration of Financial Independence

The US Federal Reserve central bank does the OPPOSITE of fundamental central-banking principles.

A central bank should:

The Fed’s repudiation and violation of basic best practices for central banking and economics mark the Fed as a failure even by the standards of central banking, and mark the Fed as one of the greatest dangers to a healthy economy.

Inflation creates profit opportunities for a favored few speculators in churning and pump-and-dump schemes that put average people on the hamster wheel of trying to earn X% just to break even after inflation, fees, commissions, market risk, political risk, and taxes. However, the average Joe and Jane’s financial and political independence requires stable money, as defined by stable prices of 0% change over the business cycle. An American should be able to stick his/her nest egg under his/her mattress (the assets insured by homeowner’s insurance if desired, no FDIC needed), and a $100 bill should be worth a $100 even 50 years later. That system would avoid the information asymmetry, risk, moral hazard, malinvestment, and wealth destruction of unnecessary middlemen and would achieve predictable stability for long-term planning in the rational-actor school of economics.

Be a signer of the Declaration. Put your John Hancock in comments.

Misleading GAO Report of Corporate Taxes Paid

The vast majority (2/3 to 3/4) of BIG US corporations DO pay taxes, contrary to 'glass half-empty' impressions given by recent media headlines. ("Most Corporations Don't Pay Income Taxes: GAO" Congressional Quarterly CQPolitics CQ Today Online News Richard Rubin 8/12/08)

The United States Government Accountability Office (GAO) released Tax Administration: Comparison of the Reported Tax Liabilities of Foreign- and U.S.-Controlled Corporations, 1998-2005, GAO-08-957, July 24, 2008.

GAO graph Figure 1 shows that most large US-controlled corporations (USCC) did report tax liabilities.

Remember that a corporation might not have a profit every year. Note the graph's correlation to the 2001 recession.

45.1% of large USCC reported tax liabilities in all of the 8 years studied 1998-2005.

97.3% of large USCC reported tax liabilities at some time during the 8 years studied 1998-2005.

Remember that "corporations" include "pass-through" corporations such as "S corporations," Real Estate Investment Trusts (REIT), and Regulated Investment Companies (RIC). These pass-through corporations are not supposed to pay "corporate" taxes because they usually end with zero "corporate" profits because the profits pass through to the owners' individual income taxes. Taxes are paid on profits but the taxes on the profits show up on "individual" taxes rather than "corporate" taxes. "No corporate tax liability reported" might be misleading if the corporation owner paid the taxes as individual income.

Remember that Section 501(c)(3) corporations are non-profit. These non-profit corporations are not supposed to pay taxes because they are not supposed to have taxable profits. The government created the explosion of these no-tax corporations by requiring/encouraging people to create them to comply with government regulations and/or qualify for government grants.

Every "loophole" is there because a Congressperson put it there.