Tuesday, October 25, 2011

Continuing Ragnarist symptoms

Succeeding Part 1.


The natural environment is one of the enemies of hateful minds. As discussed before, the primary (yet unattainable) goals of the fearful mind are order and control. The weather represents one of the most disorderly phenomenon of human habitats. For a long time, people have been pouring billions of dollars into meteorology in an attempt to learn how to predict the weather. Computers were invented and developed precisely for this purpose, to handle all the variables necessary to help predict the weather. The ultimate goal of prediction is control. Once prediction is 100% accurate, fearful minds believe that they will be able to then move to the next stage and take control of the weather, finally removing the uncertainty it provides.

100% accuracy of prediction will not be attainable, however. Firstly, because according to the Uncertainty Principle, advanced meteorologists will not be able to measure whether or not they are exactly right, because they will never know everything about the particles making up their weather equations. And secondly, because without that knowledge, they will never be able to make wholly complete predictions about the future of said particles. Yet, the “mapping-ahead” prediction of weather remains one of the fixations of the fearful mind. While the peaceful mind accepts the weather and goes on with life, the fearful mind is excessively interested in predictions of the weather, to attempt to gain control over the uncertainty of their future.

Lawns and Shrubbery

Lawns also provide a good crucible for life. In the natural world, grass grows up, sometimes so high that it denies sufficient light to the lower strands, who then become yellow and turn into fertilizer for later generations of grass. Across the surface of its natural growth, it develops endless, unchartable variations of height that cause a furor in minds fearing the disorder and randomness of the world.

To a mind seeking to resist and repress life, these natural variances are the enemy. As such, lawns must be kept under control by regularly mowing them to a rigid height, turning the grass into a neatly segmented geometrical block of color. The lawn must be excessively watered, so that it maintains an even shade of green. If planted in an area which does not naturally support grass because of its climate, the lawn must be reseeded and fertilized and watered even more, because life cannot be trusted to handle itself: it must, instead, be controlled with an iron fist.


Shrubbery is another arena of control over nature. Trees cannot be trusted to grow in any random spot where nature has seeded them. Instead, the fearful mind prefers to place them in orderly positions, even if those locations cannot sustain their life and strength. Bushes and hedges must be chopped and mutilated so that they maintain life only within an orderly geometric area that has been designated to them.

This one used to wonder why housing developers would move into an area, chop up everything and level the ground off, then save a handful of trees in pots on the back of their giant trucks in order to plant between the road dividers later on. The trees would be too weak to survive on their own, having to be taped to wooden posts just to stand. If the theoretical purpose of these hideous acts was to enjoy the trees, was there not some better way to go about it than the transplant? No, because the real purpose was control and rigidity. Of course this process is not sustainable, healthy, or real. It is merely part of the struggle of the fearful mind to control the disorderly way in which natural trees grow. Displaying it ravaged and pegged up as part of a roadway divider, a decoration around an entryway sign or the fancy name of a housing development, is like displaying the flayed corpse of a disobedient medieval peasant to other peasants considering not paying their taxes. It sends a message to nature, and to the disorderly and beautiful universe, that life is under control here, under control by power- and order-hungry minds. It is momentarily reassuring to other fearful minds, in much the same way that a medieval lord fearful of losing his position will be reassured by the sight of a flayed peasant when he comes to dine with his friend. “Ah--things are under control here.” He can breathe easy and feel temporarily safe through the demonstration.

This is why American suburbia was characterized by the lawn behind the white picket fence. The uniform block of green lawn represents that nature has been brought under control. The picket fence and straight sidewalk to the house demonstrate the same. This is also why corporations, self-producing singularities of “logos” and identical copies of the same “product,” enjoy rigid geometric displays of grass and shrubbery control. They also insist upon employing regular teams of nature-control agents who will ravage the shrubbery for them. The sidewalks must be swept so that no aberrant leaves disturb those who walk on the bare concrete. Bushes must be constantly fought to keep them from extending their filthy limbs through walking or window space. Leaves and other natural detritus may not even be dropped on the ground, between the bushes, because it will distract from the orderly appearance of the rock or grass arrangements underneath them. Spare the rod, spoil the child!

Oil and Solar Power

The more beloved way for a fearful mind to attempt to control a lawn or chop limbs from trees is with the use of a lawnmower or hedge clipper that relies on burning gasoline rather than human exertion. Hateful minds are fond of gasoline-powered machines because burning gas, which is created from oil, is burning the decayed corpses of microorganisms that lived millions of years ago. However, even if they are not aware of the origins of oil, they enjoy burning it because it shuns the natural source of earth’s energy: the sun. The sun will be around for billions of years; it burns constantly; it is the most readily available source of energy on this earth. The energy inside oil itself comes from the sun.

The fearful mind does not like energy from the sun, because the sun is a constant reminder of the fearful mind’s lack of control and singularity. The fearful mind is unable to control whether clouds will come out, unable to keep the sun from moving around the sky, and unable to make it daytime or nighttime when it wishes. Likewise, the fearful mind shies from wind power, because the wind cannot be controlled.

An energy source that can be controlled is oil. Because it represents a “battery” of sun energy stored through photosynthesis within the bodies of organisms from millions of years ago, it is a more reliable, more predictable way for the fearful mind to gain energy. It prefers a cold, black, liquid battery instead of the sun, even if the process of utilizing energy from that dead battery is smelly, loud, and disgusting. Indeed, the foul burning and refining processes that allow energy to be drawn from oil are a blessing to the fearful mind, because they are an attack on the tranquility of the natural world.

Oil and Cars

Fearful minds prefer loud, smelly, consumptive vehicles. It may not be wise for their wallets or convenient to their urban lifestyle to, say, drive a vehicle six times as large as they need. However, it is an expression of power and control. The great noise it creates upsets the equilibrium of the natural environment and tricks the human into thinking that he or she has exerted some manner of control. Its size can also fool the human into feeling shielded, isolated, and singular. Its ability to consume and destroy more than it needs flies in the face of the way natural things reach a state of balance with their environment.

Nuclear weapons and mass Destruction

One massive quandary for this one as a youth was the question of nuclear bombs. This one would agonize with worry at the thought that, during the Cold War, some madmen might actually consider using nuclear weapons. How insane could you possibly be, this one wondered, to even begin to consider employing in your defense a device that released deadly radiation over a large area? Let alone more than one? Wouldn’t it be preferable to die, or even to--dare say!--compromise, or make concessions, in order to avoid killing yourself, and billions of others, and kill them slowly, by poisoning the ground, the water, and the atmosphere itself by flooding things with bomb after bomb filled with radioactive particles?

As always, the theory of stupidity came back to save me. This one ended up concluding that anyone who would use nuclear bombs was “stupid.” Well, maybe this was right. But viewing the quandary anew under the concept of a fearful mind offers a better explanation. Indeed, it is utter madness to think that so many people accepted or were willing to carry out the concept of a shared nuclear exchange during the Cold War. What would be left to save? Once something got started, where would it stop? The mere idea of being willing to let loose such unfathomable terrors is a bluntly hideous evil that stands directly contradictory to any concepts of mercy, peace, and life. But to the fearful mind, this is all par for the course.

Instruments of death and destruction are always fascinating to the fearful mind, because the fearful mind is the hateful mind. Destruction is the only way to attempt to bring about order, because once something has been demolished it is no longer capable of disorderly acts. Death is the ultimate expression of order; the ultimate victory over life and our living universe. Nonexistence stands as the opposite of existence. As existence is constantly fluid and changing, nonexistence is forever one single way. It is orderly and perfectly under control. Everything balances out, and all equations can be completed without trouble. The nonexistence of death and destruction is continually sought by the fearful mind, because it offers an end to the struggle with deviant thoughts. Hateful minds perpetually rush to fill the fearful void with more, more, more weapons and destructive potential. It is never enough.

This is the reason for the creation of terrible weapons. This is the reason for the willingness to use terrible weapons: because however it is expressed, it actually represents a desire to wipe out life. This seems like a simple conclusion--that those who want to kill have serious problems and could be the death of us all--but raw tons of stinking propaganda have somehow managed to muddle the issue and convince otherwise reasonable people that it is acceptable to argue for poisoning and destroying the human population.

People who on the surface appear good-natured and loving can, if they fear the multi-faceted nature of their mind, fall victim to the hate of life. They may say they love their children, regularly donate to charity, help old ladies with their groceries, and then casually mention that they are “willing to use ultimate force” to teach this or that faction a lesson, even if it could bring retaliation in kind. They would say that they don’t “want” such a thing, but that would be a falsity; being “willing” to use said force merely means that they imagine themselves wanting to do so, if merely the conditions were right.

Sex, Evolution

Sex is one of the most loathed concepts of those who hate life. This stems in large part from the fact that it can create life. The reproductive process itself is bane to the hateful mind, because it cannot be controlled. As mentioned earlier, when two people reproduce the child will have some different characteristics than either of them. This is not just because of the random mixing and matching of the parents’ characteristics between the child. It is also affected by the natural process of mutation, whereby--just as particles pop in and out of existence in a vacuum at random--life evolves and changes even as it is created. Without these random mutations during reproduction at the subatomic level, it might never have changed from single-celled organisms to starfish, ducks, and chimpanzees.

These random mutations that life undergoes are loathsome to the fearful mind, because they cannot be controlled or predicted. They are proof with each new child that the world is disorderly, just like each unexpected gust of wind. Fearful minds attempt to counter this by fabricating theories of human “creation” or “crafting,” as out of mud, wherein a singular deity creates mankind directly as mankind, rather than by going through a random process of cellular mutation. Even without biology, minds at peace can easily imagine that humans were not always the same, simply by seeing themselves change over the course of their lives, seeing different children being born, or by watching generations of flowers and crops and using the imagination. Likewise, well before Christian creationism hateful minds can and have conjured up visions of humans being created purposefully by a singular force.*

The most important reason for the hatred of sex, however, is not its connection to life, because many who battle against sex are not even consciously aware of, or accepting of, the mutative properties of life. Rather, it is the battle with the individual mind’s own sexual drive that spawns much of the public behavior toward sex. As a part of life, human instinct is a constant natural drive that continually assaults the fearful mind with reminders of its own lack of control. Instinct is one of the providers of the “deviant thoughts” that upset the false singular view of the self at the base of the fearful mind. Among these deviant thoughts are sexual urges, which never stop reminding the fearful mind that no matter how they dislike it, they remain a part of a real, changing, living world.

The struggle within the mind is cataclysmic. The fearful individual tells him or herself that he or she is singular and in control of their thoughts and actions. They focus fervently on this belief, perhaps praying, perhaps meditating, perhaps just squeezing their eyes shut and concentrating. Then they get up and attempt to go through the world. But then--bam!--their mind generates a sexual urge. They are guilty and shamed that they could have thought something so wicked. They are afraid of the depths of their own mind, and wonder how “they”--their singularness--could have produced such a thing. Are they wicked themselves, through and through? Are they defined solely by that foul sexual thought they just experienced? They must be, because they are singular. But no, they believe they can control it, so they fight it back down. The sexual instinct, however, remains a powerful one, and the battle will continue as long as they are alive, unless they manage to alter their chemistry or biology enough to flee entirely from sexual life.

The sexual battle within the head can never be healthily resolved. Many who attempt to repress their sexuality have, as when attempting to plug a geyser, outbursts that result in even more negative behavior than that they were attempting to repress originally, such as imposing their sexual will on a weaker person, after which they may regain control for a time. A more simple way for them to win this battle, though, is by acting it out in the larger world. In the larger world, they can “win,” because while fearful minds cannot control the thoughts in their own head, they can control what their mouths say. Thus, fearful minds can group together for the purpose of bolstering one another’s sexual repressions by play-acting perfect expressions of anti-sexuality.

For example, fearful minds can form social groups where sexual activity is rigidly controlled, and where they congratulate one another incessantly on their victory over sexuality, while at the same time lambasting others for not winning that same victory (an act which is in itself self-congratulatory). These constant congratulations are needed to continually reinforce the charade that they have each won the battle inside their heads, which they never have and never will. Nonetheless, the charades must continue. For example, religious groups will congregate and discuss the sexual sins of their community at large, feeling superior as they bolster their own image of triumph. Occasionally, they may confess weak moments and deviant thoughts or urges to one another as part of a ritual celebration of the greater victory against sex.

* Of course, the divide between “creationist” and “evolutionary” views of the world is not the end-all determinant of which minds are fearful or peaceful, or how much. No one fearful mind will necessarily exhibit all of the fearful characteristics, just as no peaceful mind will be immune from every failed search for order. Indeed, many fear- and hate-based religious organizations now accept evolution simply because they wish to be seen as scientific even as they perpetuate their core messages. This phenomenon will likely occur similarly should any of the other trends discussed here--like the use of solar energy--become overwhelming enough to cause a shift in fearful-mind behavior. The primary and most important defining conflict of the fearful mind begins within their own thoughts, irrespective of public actions, and the trends discussed here are merely the way they are playing out within a certain period of time.

Continued in the short Part 3.

Ragnarist symptoms

Not every ragnarist case has reached the fullest stages of self- and world-loathing. Like everything in the world, the sickness is relative and subjective. A ragnaristic mind may exhibit fear to such a small degree that it retains a general respect for the world, or that its fear and hatred of the outside world is managed by biological instincts of love and empathy, the opposing counterpart of fear and hate.

For example, lesser fears of the mind may simply result in a feeling of constant guilt, as the mind manifests its worries by linking its guilt to tangible actions in day-to-day life. For example, feeling guilty at not accomplishing “enough tasks” during the day, when the guilt has truly originated over deviant thoughts in the mind. Thus, a rational discussion of why the amount of tasks accomplished that day was sufficient will do nothing to alleviate the negative sensation.

Even the most befouled minds, though, may incessantly speak of their love or affection for various things. However, speech and action will generally bear out the truth as the ragnarist resorts to the linked behavioral patterns associated with some degree of hatred and fear of the self and the world.

Early Symptoms of Ragnarism

Desire to repress sexual behavior and physical bodies through social or governmental controls

Easy to recognize: involves disapproving of expressions of sexuality, including public kissing, movies with nudity, navel rings, homosexuality in general, “gay marriage,” or other reminders of sexuality.

General passion for authority, the more singular and/or centralized the better

Do not be misguided into thinking that this applies only to a preference for federalism or centrism. Remember that “authority” can mean many different things, including intangible authorities.

Decisive leaders are better than ones who debate, to the ragnarist, because they feel more authorative, and thereby make the ragnarist feel more comfortable.

Desire to divide living things, objects, avenues of inquiry, and the like into various classification systems, the more complex the better.

Heirarchies are eminently loveable to the ragnaristic mind, which wants to have everything fitted into its place, so it can be classified and identified. This makes them feel comfortable, as though they have a better handle on the changing world.

Ragnarists do not like tampering with their categories. This helps explain the resistance to “gay marriage,” because once the heirarchy has been created in any worldview, those who try to go outside the boundaries of the heirarchy become upsetting. The ragnarist is upset because if people are able to go out of the imaginary boundaries without being destroyed, it challenges the ragnarist’s view of the world.

Desire to express strength and authority to the world

Guns, big trucks, loud stereos, etc. By manifesting these indica of power and authority, ragnarists feel that they are more in control of what is happening around them, just as they wish to control their own errant thoughts.

Fondness of absolute forms

Ascribing loyalty to a cultural form, be it band or sports team devotion, the logo of a favorite coffee shop or clothing designer, etc., represents the desire for a more fixed, unchanging, unrealistic world. The team or clothing logo is an easily recognizable symbol, and helps fit people into heirarchies based on what they like. That is why ragnaristic thought believes that you can get to know a person by finding out which corporate logos (bands, television shows, clothing) they associate themselves with.

Moderate Stages of Ragnarism

Belief that the world is coming to an end in the near future

“Near” being relative. This belief is part necrotic fantasy, part generalized fear. The generalized fear component is easy to understand: simply, the same fear of uncertainty and death that motivates the ragnaristic mind in the first place.

The necrotic fantasy is the more dire component of the two, because it represents the ragnaristic mind’s desire to end all the uncertainty and fear of living. It is a quixotic paradox of the future, where all uncertainties have vanished in the void of death and the end of existence, and the ragnarist can at last find “peace” from the difficulties of life.

This desire is commonly manifested in a desire for apocolyptic entertainment and lore. Most cultures have one or more religious necrotic fantasies in common acceptance, often with a recurrent theme. For example, in the Old Testament, Noah’s Ark and the flood, the genocide of the Nimrods, the destruction of various cities, and of course, the New Testament and Revelations and the Second Coming. These types of stories are highly appealing to the ragnarist.

Depending on the mode of entertainment, the mass killing is always perpetrated by the “bad guys,” but the entertainment most appealing to the ragnarist will involve an excessive focus upon the acts of mass destruction portrayed, the witnessing of the devastation, and of course, the vengeance the hero gets to take afterward.

Belief that the world is relatively young

“Relatively young” being based, of course, upon the individual’s own perception of time. This occurs because the ragnarist views his or her own struggle with the uncertainties of the mind, and the uncertainties of the world, as the paramount qualities of creation: namely, that they are at the center of the world. The ragnarist is disinclined to believe that the world could have existed for very long prior to his or her own life.

As the ragnarist gains more knowledge about the world, and comes to be aware that more things may have existed in the past, the “self image” of the ragnarist extends into the past, to make the acceptance of a longer time period possible. For example, the ragnarist may conclude that the world has existed only as long as his or her species has existed, or his or her planet, or his or her belief in the physical laws of the universe.

General misogynism

Females, by virtue of their intrinsic life-creating and nurturing physiology, represent a natural target of dislike for the ragnaristic mind. An underlying belief in the unworthiness of female qualities will often occur in the ragnarist, including derision toward, or disbelief in, sharing, cooperation, empathy, physical frailty, the care of children, provision of food and necessary developmental comfort, et cetera.

A few examples: ragnarists will be scornful of diplomacy; they will be fierce defenders of property rights; and they will resist attempts to provide medical services, milk, food, and clean water to children.

Women, and by extension, children, represent the future and hope of life, and particularly, the human variety of life. Thus, while social mores may prevent many ragnarists from doing direct violence, the ragnarist will resist attempts to better the condition of hapless children unable to provide for themselves, under the hallmark of expense, and will be hostile toward prenatal medical care, nursing support, free time for mothers to mother, school lunch programs, and the like.

The female human womb is a target of particular ragnarist vitriol; see “abortion."

Female ragnarists will often feel a desire to defer to authoritarian male elements around them, and try to find identity by fitting themselves into the appropriate rungs of a constructed heirarchy.

Sexual failing

All of the disapproval of expressions of sexuality comes to a head at the moderate stage of ragnarism. Ragnarists feel a desire to fight against those who remind them that sexuality exists, and at the same time, their own inner battle against sexuality becomes more difficult to fight. Self-repression abounds, and rape or pedophilia may emerge, often in tandem with violence that, on the surface, may be performed in such a way as to seem distanced from a sexual motivation. (Violent pedophilia is often tied to the hatred of wombs and offspring; see immediately preceding section.)

Extreme Stages of Ragnarism

Belief that the world is coming to an end in the very near future, or immediately

This mirrors the moderate stage, as discussed above, except in proximity. The most extreme ragnarists believe that the world will end very soon, and often want to hasten the process along by killing themselves. For example, eating poisoned jello. They believe that they will be removed from the world somehow, either before or after death, by alien spaceships or supernatural beings.

This belief frequently includes the facet that, when they are removed from the world, they will be judged by the contents of their minds. The ragnarist believes this, because the ragnarist believes that he or she is at the metaphorical center of the universe, and that the supernatural beings or aliens (or whatever else) will be extremely concerned with the specific qualities of the ragnarist’s mind. This fantasy traces its roots to the original conflict between the ragnarist’s sense of absolute self, and the errant thoughts within the ragnarist’s mind.

The necrotic fantasy of the end of the world here takes on a more fervent tone, as the ragnarists approach the end of the existence in an erotic way. They cheer in enthusiasm at the thought of mass death; they stoke the fires of war and destruction with hopes that soon, it will all end.

Extreme misogynism

All the qualities of femaleness are loathed by the extreme ragnarist. Weakness becomes a target for unapologetic pulverization; attempts at self-control by females are viewed as loathsome. The mere incidence of physical frailty induces an attempt to destroy, and physical violence, in regular, terrible patterns, occurs.

For extremely ragnarist females, self-hatred becomes particularly keen, and the desire to follow orders, receive painful punishment and deny biological self-structuring is increased exponentially. Or, the ragnarist female may coalesce into a scathing attempt at authoritarian, “male” behavior, and model herself on everything she fears.

Resumed in Part 2.

Monday, October 24, 2011

From Black Agenda Report

Worth going through in full, from Glen Ford.

Friday, October 21, 2011

On Dawkins

IOZ, this one finds your use of "nonentity" offensive, as it suggests that Dawkins' relative fame in comparison to his debating partner makes either or both parties unworthy of making fools of themselves in front of everyone. Dawkins' opponent, and Dawkins, should both have that ability as much as the rest of us; they shouldn't lose their statuses as living entities for doing so or for wanting to do so.

Dawkins is, also, promoting his book and/or persona in front of a compliant media that is searching for a token fool "anti-God" person. He's allowed media time because, like Bachmann or Kucinich, he is a useful strawman; he presents absurd, self-contradicting atheistic faith against absurd biblical faith. He makes a lot of money and fires up his base; his religious opponents make a lot of money and fire up their base; and, neither could do as well without the other. You can't blame the guy arguing with him for trying to do the same.

In that way, he's just a simple man trying to make it in the jungle, and doing a better job of it than most. He already has more major media coverage than you, and of course, Dawkins is way ahead. Reprehensible, perhaps, and part of a reprehensible system, but still an entity. Switch out your arrowheads.

Tax Theft 7

Continued from Part 6.

Business Valuation Schemes

Business valuation schemes use the estate tax rules to extract from the body politic. Once you understand the many humorous fictional entities that live among us, such as businesses and trusts (as discussed in the previous part), it is easy to see how business valuation schemes work.

What business valuation schemes are good at is pretending that assets are worth less than they are actually worth (similar to how the artificial IOUs worked between Owner and Trust in Part 6). Lying about the actual worth of assets is a simple way to avoid tax. For example, pretend that Worker 1 works for a year and earns $20,000. The tax rate is 10%, so he owes $2,000. However, if he lies to the rest of us, and says that he only earned $10,000, then he will only have to pay $1,000 in tax, and he has successfully stolen $1,000.

Now imagine that, instead of lying about his earnings for a year, Owner A has $11 million in the bank, and that there is a 50% estate tax, and a $1 million estate tax exemption. Owner A dies. $1m of his $11m is exempted from estate tax, leaving $10m subject to estate tax. At the 50% rate, that is a $5 million bill.

So, to solve this problem, Owner A lies about his net worth. He tells the IRS that he only has $6 million, rather than $11 million.

If he gets away with this lie (rather, if his heirs get away with it, since he is dead), he will be taxed $2.5 million instead of $5 million ($6m of acknowledged assets - $1m exemption = $5m subject to tax, x 50% rate = $2.5m). Thus, he will appropriate $2.5m from the rest of us. Schools, police, firefighting, roads, health care, armies, economic development, et cetera.

Of course, he will not get away with this lie as it stands. Rather, he will need to rework the untruth into an acceptable form. To lie successfully, Owner A must "sell" his assets to a business he owns. Just like the fictional trust, our society accepts that if Owner A writes down business rules on paper (sort of like writing the attributes of a monster in a Dungeons & Dragons game) then the business comes to life and exists, and can do things independent of its creator.

This is antilife; logos; godplay; ragnarism; mental sickness. Our society nurtures and loves these imaginary Frankenstein's monsters exactly because they do not exist: they are sick creations of fearful minds. For, reasonably, imaginary things cannot "own" or "do" or anything else. Imaginary things only have life among those who believe in them. So, "Jedi Knights" can exist to Star Wars fans, but if we write Jedi Knights into our legal code and allow them and their statutory lightsabers to "do" things, we have a problem.

Once Owner A has created Business B, and sold his $12m of assets to Business B, he is ready to prepare for the business valuation scheme and cheat us all out of $2.5m in taxes. He now "divides up" his imaginary Jedi-Knight business into pieces, and hands them out to his children and friends before he dies. So, out of Business B, he cuts 5 slices:

Business B Piece 1
Business B Piece 2
Business B Piece 3
Business B Piece 4
Business B Piece 5

Each of these slices of Business B is 1/5, or 20%, of the whole.

So, the logical conclusion would be that each part is worth 20% of the total. But that is not what the IRS says, and that is how Owner A steals from the tax base. He argues that 1/5 of Business B is not actually worth 1/5 of Business B. Because it is only 1/5, it is a minority interest. Maybe he put a restriction on it (as in the advanced trust schemes discussed in Part 6) for sale, so that it can only be sold to other family members. Thus, he can say it is worth even less, because it is not "freely marketable." And so, using these excuses, he (and his heirs) can pretend that all the pieces of Business B are worth much less than they actually are.

So, each 1/5 piece gets valued at less than it is actually worth. When you add up all five of those values, the sum total is less than what Business B was worth to begin with--a lie you can achieve just by imagining such an entity as Business B, then imagining that you sell your things to it, then imagining that you divide it up like pie.

Of course, the only reason Owner A divided up the business this way was to perform the tax cheat. Once he dies, his heirs--the same people who would have gotten the business anyway--file an estate tax return listing the phony value for Business B. Then, they consolidate their shares in the family, and either sell them off at market value (i.e., the actual worth of the business), or they keep running the business themselves. And the value of the business has successfully done a skip and a jump right over the estate tax into the dynasty's next generation.

Tax Theft 6

Succeeding Part 5.

Advanced trust schemes

Using tax trusts to double up the estate tax exemption amount is sufficient to eliminate estate tax liability when the holdings of a dead noble are under double the exemption amount. For example, if the exemption amount is $1 million per person, and Owner A and Wife B own $2 million of assets, they can use the credit shelter trust trick to shield the full $2 million from estate tax. The amount is artificially low now, and will likely jump much higher in the near future, or if kept low, be offset by different parts of the overall tax regime; however, even should the exemption amount be reduced, tricks are available to keep the aristocracy from paying its supposedly fair share of tax on amounts above that already-doubled sum.

Advanced trust schemes are actually quite simple, once you accept the legitimacy of various assumptions on which our society is based. One of these we have already learned to accept: the tax trust. For example, if a wealthy person says, "I have a trust," we all agree to be nice and pretend that there is an imaginary person called Mr. Trust who owns property and does other things. Accepting that various trusts can be independent entities is a vital part of our economy, without which tax theft could not continue: nobles need to be able to make up imaginary people who can do business with them in order to keep the wheels running. So, we all accept that if someone creates a business or a trust, that entity can own property, pay taxes, make income, take actions, make decisions, have interests, etc.

So: for advanced trust schemes to work, we must all accept that a person, Owner A, can create Trust A, and that Trust A is then its own separate entity, distinct from Owner A. Of course, Owner A can do just about anything he wants with property that "belongs to" Trust A. But by law, Trust A can be a separate entity from Owner A.

This is where the fun part comes in. Assume that Owner A has $12 million of assets, he is very old, and he expects he will die in a few years. He has a tax trust, Trust A, all set up so that he doesn't have to pay taxes on $12 million of those assets. This means that, unfortunately, he has $10 million of assets subject to tax (12 - 2 = 10), at a very high estate tax rate (say, 50%). That's a "tax liability" of $5 million; in other words, when he dies, he will owe the country $5 million.

To get out of having to pay this, he comes up with an idea. First, he creates Trust B. Then, he sells Trust B $10 million of his assets. Those assets might include an apartment building, a plot of land in a gated community that someone less worthy could otherwise build a house upon, a commercial building, ownership interests in other businesses, oil/gas rights, etc.)

The fair market value of these assets is $10 million, which is what would be included in Owner A's estate when he dies, and thus be subject to tax. However, Owner A is clever, and when he sells the property to Trust B, he writes the deals in a strange way.

Firstly, Trust B does not have any money to buy the assets--certainly not $10 million. In fact, Trust B was created with only $10.00 to start. So, Trust B gives Owner A a promissory note (an IOU) instead of cash.

Then, instead of Trust B having to pay a market rate of interest (which is the rate of interest anyone else would charge Trust B for borrowing $10 million--a theoretical rate, since no one except Owner A would loan the utterly broke Trust B anything), Trust B pays the lowest possible federal rate. This is generally kept several points of interest lower than the market rate by the Powers That Be.

For example, let's say the market rate is 7%. This means that if you borrow $1 million for one year, you will have to pay back $1,070,000, for total interest paid of $70,000.

So, if you borrowed money from someone at less than the market rate (say, 5%), and then reinvested it, you could turn a profit: for example, if you borrowed $1 million at 5%, you would be expected to pay back $1,070,000, for total interest paid of $50,000, at the end of the year. Thus, if you were clever, you could borrow $1 million at 5%, invest it at 7%, and receive $1 million, $70,000 on your investment. Then, you would pay back your original loan for $1 million, $50,000, and have a $20,000 profit.

For this reason, if the market rate is 7% (or near 7%), no one would loan you money for 5%. Why would they? That would just cost them the 2% difference; i.e., if they loaned you $1 million at 5%, they would be losing $20,000 that year. The only reason someone would do that is if 1) they were gambling that the rate would go down lower than 5% during the year, so that they would be making money on your loan by locking you into that rate, or 2) it wasn't really a loan, but a gift of the amount of difference in interest.

The IRS, though, is very nice to the wealthy. It establishes the federal rate, which is the rate you can make loans at without them being considered gifts (and being subject to gift/estate taxation). The federal rate is kept very low compared to the market rate--in good economic times, it hovers around 3%, and may drop drastically close to zero during bad economic times.

So, clever people can transfer wealth without having to pay gift or estate tax by using sham loans at the federal rate. As this one expressed before, no one actually gives loans to someone at such a low rate, unless it is a gift--the purpose of the lower federal rate is to allow clever people to structure gift transactions as "loans" so that they can transfer wealth between generations of a dynasty without that wealth having to pass through the estate or gift tax process.

But, returning to the main subject of advanced trust schemes: Owner A has just sold his trust, Trust B, $10 million of assets. And, he has made the sale at the federal rate, rather than at the market rate. This means that his imaginary friend, Trust B, is getting a huge deal--$10 million of assets that he can invest at market rate, which he only had to pay federal rate to acquire.

This isn't small potatoes: if market rate is 7% and the rate of the loan Trust B took out to buy the assets (federal rate) is 3%, Trust B can invest the $10 million, make $700,000 in the first year (7% of $10 million), pay $300,000 interest on the "loan" to Owner A (3% of $10 million), and have a $400,000 tax free gift in the trust.

This gift of the extra money the trust made will ultimately go to the trust's beneficiaries, i.e., the same people who would have inherited that money directly from Owner A if he had died without making up Trust B first. That money would otherwise have been in Owner A's estate, and subject to estate tax. This fake "sale," where Owner A pretends he is selling his assets to an imaginary person named Trust B, is one of the tricks used to get Owner A out of paying taxes based on what he is actually worth.

A nice savings. If Owner A had invested the $10 million himself (rather than having his imaginary friend Trust B invest it), he would have had the $400,000 of income in his estate when he died at the end of the year. That $400,000 would have been taxed at the high estate tax rate (say, 50%), so by making up that imaginary person (Trust B), he just avoided $200,000 of tax. If he lives for another year, and the trust makes another $400,000, there's another $200,000 of savings. If he creates the trust 5 years before he dies--well, the "savings" just goes up.

The savings on Trust B's earnings, though, is just one way to get out of taxes using the "selling assets to your imaginary friend" trick. An even better part of the trick, which Owner A has already used, is that the debt Trust B gave him in order to purchase his $10 million of assets is nowhere near $10 million, even though that's what the IOU says it is.

How does that work? Well, think about it from Owner A's perspective. He sold assets to Trust B so that they would not be "his" anymore, and therefore subject to that nasty estate tax. However, doesn't it seem like if he sells $10 million of assets in exchange for a $10 million debt (Trust B's promise to repay him for the assets), his estate did not actually get any smaller? For example, reasonably speaking, if Owner A sells Trust B $10 million of assets in exchange for a $10 million debt with interest, and then Owner A dies, that debt--that IOU--is worth $10 million, right?

Wrong--and therein lies the best part of the "selling assets to your imaginary friend" plot. For a number of reasons, the IRS allows Owner A to pretend that his IOU of $10 million is worth less than $10 million.

One reason might be that the interest rate is so low. But wait--I thought, if Trust B promised to pay the federal rate, then the transaction was completely acceptable and legitimate. Well, it was--except that, once it has been deemed legitimate, Owner A can say that the IOU is worth less than $10 million, because it is not paying a market rate of interest. Owner A's argument is, "This debt is not even paying me market rate! So, I am losing money on it, because if I had invested my $10 million of assets elsewhere, they could be making a higher profit than federal rate!"

Luckily for Owner A, he is allowed to have his cake and eat it, too. So, because the IOU is at lower than market rate, he can value it at, say, $9.5 million instead of $10 million.

Thus, $500,000 more of assets are exempted from estate tax because they are owned by an imaginary friend who gave him an IOU worth less than the assets. This is considered intelligent American tax planning.

But we're not done yet. There's another problem with the IOU that Owner A has. Can you guess? That's right: it's an unsecured loan. Unlike your typical home mortgage, which is secured by an interest in the house in question until the buyer pays the bank off, the IOU that Trust B gave Owner A is not secured by an interest in any of the assets that Owner A sold Trust B. So, clearly, Owner A's IOU is not even worth $9.5 million. As Owner A would say, "No one else would buy this risky IOU for $9.5 million--not without security!" So, he is allowed to value it at, say, $8.5 million instead.

Another $1 million saved from estate tax. But wait--you guessed it. There is still another problem with the IOU that Trust B gave Owner A. It has limitations on transfer. As part of the IOU agreement, Owner A agreed to limitations on how he could trade the IOU for someone else's IOU. For example, the IOU contract might say, "This debt is non-transferable on the third, seventh, and nineteenth days of any month" (or some other similar nonsense).

Because of this "transferability problem," Owner A could argue that, on the free market, he couldn't get $8.5 million for his IOU, because potential buyers would be put off by the limitation on what days of the month the IOU could be transferred at. So, Owner A gets to value the IOU even less. Let's say down to $8.3 million.

And so on. In the end, Owner A will actually end up paying some tax, but he will avoid hundreds of thousands of dollars (or millions and millions, depending on how many assets are "sold" to how many "trusts") of his fair share. He might sell the IOU to someone else in exchange for a different IOU to another wealthy person's trust, or he might sell it for other business interests, and in doing so, cause it to be "worth" even less.

Now, in a sane world, someone might point out that the whole reason there are so many "problems" with the IOU is because Owner A doesn't really have an IOU from his imaginary friend; rather, he is just playing pretend with his assets so that he can act like they are worth less, and skip out on his tax. But in America, that viewpoint holds no water.

Trust B, as just described above, is the Intentionally Defective Grantor Trust, or IDGT ("I dig it"), which is one of the most commonly-used tools for reducing estate tax for nobles with estates larger than the doubled exemption amount.

Followed up in Part 7.

Tax Theft 5

Continuing from Part 4.

Interest deduction schemes

Short and simple. Home mortgage interest deductions offered by the IRS are familiar to many people. These work by subtracting the amount you pay as interest on a loan from your taxable income, effectively lowering your income tax.

So, if your income is $50K, the tax rate is 10%, and you pay $10K for renting an apartment, you pay $5K in taxes (10% of $50K). If your income is $50K, and you pay $10K in mortgage interest, you pay $4K in taxes (10% of $40K, or 10% of $50K income minus $10K mortgage interest deduction).

Two things about the interest deduction are important to tax theft. The first is, this deduction is available for commercial loans, not just for regular American citizens trying to afford the house they live in. The commercial transactions discussed in Part 4, where the wealthy transfer properties between one another, are facilitated by commercial interest deductions.

Here's how it works: we already know that the aristocracy avoids tax by using the step-up in basis at death to wipe out any tax when huge amounts of appreciation income are transferred between dynasty generations. We also know that, in order to transfer property before death without being taxed, they use reinvestment in similar industry schemes to to swap properties between families without having to pay tax. So then, where do they get liquid cash to buy luxury cars, home furnishings, vacations, et cetera.?

(Note: when considering all these tax theft plots, do not forget that other types of investments--from cash to stocks to bonds--are also being held and used by the wealthy. When these accounts grow in value, income tax is primarily cheated through the step-up in basis: each generation holds funds that grow in value, with the growth being wiped out at the older generation's death. In the meantime, dividends, interest and rents--the benefits of nobility--are still being kicked out to the owners. There is some income tax actually paid, but at a massively reduced rate from the income that is actually occurring. The wealthy do pay some taxes, but the brilliance of the theft is that they are not perceived as being totally exempt from taxes, and thus, the schemes continue. This is part of where the "CEO pays at a lower rate than his secretary" anecdote comes from.)

Back to liquidity. When nobles sell real estate at huge gains, and want to reinvest the gains (via a business) into a "similar industry" in order to avoid paying tax on their gains, they do not actually reinvest those gains. Instead, they keep them for fun and spending, or for other investment purposes. The place that they get the money to "reinvest" is through a commercial loan. Commercial loans come from banks, like mortgage loans, and the interest that the wealthy pay on them (again, through corporations and trusts) is deductible from the income tax they would otherwise be fairly paying.

Dizzying, if one tries to accept this as fair or reasonable--this type of scheme being why taxes are considered so complicated. They are complicated, so as to make it more difficult for a tax-ignorant lower caste to perceive how they are being had.

Basically, what the interest deduction means is that regular taxpayers--the body politic--subsidize the aristocracy's business transactions. Let's say that, after dodging as much tax as he possibly can using other tricks, Donald Trump owes tax on a taxable income of $5 million. In essence, this means that the city/state/country he lives in needs $5 million more to run society--pay for police, fire, schools, military protection, road-building, etc. The services actually offered to the lower caste are inadequate, which is where zoning and physical segregation come in, but there needs to be a facade of such services in order to establish an efficient aristocracy that has to deal less often with expensive rebellions.

What does Donald Trump do? To get out of paying that tax, he simply borrows $100 million at 5% interest on a commercial loan, and invests it in an expensive, fancy building. He pays his friends at the bank $5 million a year interest, which he then deducts from his taxable income using the interest deduction. And, his tax liability goes down $5 million, which means that the rest of the body politic has to pick up the tab.

Understanding how commercial loans are justified by the nobility requires understanding the basics of our money system. Thankfully, both are simple, and they stem from the idea of impartial money.

Impartial money (which is something of a redundant phrase) refers to the idea that money--numbers on a page or cash in the hand--is detached from the effort that created it. I.e., if I work hard to dig a hole and am paid $5, I can walk down the street and get mugged. The mugger then has the $5. When he goes to buy beef jerky with that $5, the clerk taking the bill does not know that the $5 was earned by digging a hole, or even that it was earned by mugging. He just knows that it is $5, so it is "worth" something.

This is the price that regular people pay for living in a system where the means of exchange--money--is divorced from the means of creation--work. Without impartial money, people who did nothing but sat on their asses and "owned" things for a living would starve off, because their efforts--zero--would produce nothing of value. If the economy were based on reputation, hard work, and individual effort, then the means of exchange could be attributed to the person who did the work. This might not have been possible once, but it is now, with technology--similar to ebay feedback, and the kind of conscientious fund-tracking that modern banks are capable of, our means of exchange could be tagged, so that we know where every dollar and cent originated, and who it passed through. The aristocracy's banking system, however, does not allow this option to enter into feasibility, because impartial money is required for most of their schemes.

Impartial money works in commercial loans because it helps smokescreen the source of funds. As discussed in the previous section, reinvestment in similar industry is used to justify postponing (forever) income tax caused by an increase in the value of a property. It relies upon the assumption that there is no income realized when a wealthy person sells a property, as long as they immediately reinvest those same funds in another property. How can I pay the tax, the wealthy person asks, if I just spent all the money I made on selling Property A by buying Property B? (Of course, the person of average means may not protest that he spent all his taxable income on rent, food, and retirement savings, and should therefore be exempted from tax. He would end up in jail and have his accounts emptied.)

The joke comes, however, in between the wealthy person's sale of Property A and purchase of Property B. Once Donald Trump sells Property A, and puts the $10 million from its sale in his bank account along with all his other millions, the impartial money mixes together. It is indistinguishable from all of the other millions that are already in his bank account. How can you tell if he "reinvested" those exact funds in a "similar industry"?

You can't. So, the aristocracy just gets the benefit of the doubt every single time. The wealthy owner sells a property, pockets the proceeds, and then buys another property later. It doesn't matter if he keeps all the cash from the sale in one account, and uses money from a commercial loan to buy the new property. Once the impartial money from the commercial loan enters his bank account, it is indistinguishable from the funds he received from the sale of Property A--it's all transacted in impartial dollars, with no beginning or end.

So, anytime he wants to sell a property that has a huge gain in value, he sells the property, keeps all the money, then takes out a commercial loan to buy something else--and doesn't have to pay tax on the first sale, because he has "reinvested." Then, he gets to deduct his tax even more by using "interest deductions."

The picture described in Part 3 now grows even more fun. The wealthy spend their days engaged in commercial real estate transactions (okay, let's be fair; they have people to do that for them while they sleep and/or golf), acting out a Game of Houses by buying and selling different properties, and loaning money back and forth between each other--and with every single transaction, they get a deduction! Owner A sells Property Z to Owner B. Owner B gets a loan from Bank Y (which is owned by Owner C's three corporations, four trust funds and two LLCs) and deducts the interest. Owner A buys Property X from Owner B and gets a loan for it from Bank Y. Owner B wipes out his income tax on Property X by buying Property Z, while Owner A wipes out his income tax on Property Z by buying Property X. All of their lawyers get a respectable slice of the pie, and then they all fly to New Zealand for a two month vacation before returning home to sign a new set of papers, sponsor a new deal, and make another few million bucks. Fun!

Resumed in Part 6.

Tax Theft 4

Continuing from Part 3.

Reinvestment in similar industry schemes

After understanding the larceny possible with the step up in basis, the "reinvestment" scheme is remarkably easy to understand. It stems from the concept of realization, the trick used to postpone paying income tax on the investments of ownership (in contrast to the investments of work, which are valued taxed paycheck to paycheck, and yearly). A quick review: realization is in imaginary leap referring to the time when income is "realized," and thus taxed: thus, the aristocracy can employ realization to shield their income from taxation. So, if a wealthy man owns land that goes up $100 in value, and an average man works and earns $100, the average man is taxed, while the wealthy man says, "I have not realized my income until I sell the land."

What happens, though, when the wealthy man sells his land? Is he taxed then, after being able to put it off for as long as he wants (or forever, using the step-up in basis technique)?

No. He is again protected from taxation, through the trick "reinvestment in a similar industry." The citation for this scheme is Internal Revenue Code Section 1031.

How it works is this: the wealthy man owns his property through a business. Let us say that Wealthy Man A owns Business B, which owns Land C. So, A owns B, which owns C.

C goes up in value $100. B (at the direction of A) then sells C, thereby realizing $100 of gain (the realization scheme relies upon the fiction that income is postponed until the time of sale). Then, A wants to avoid tax, so he has his business use the proceeds of the sale to buy another piece of property: a factory, a building, a farm, et cetera. The "reinvestment in similar industry" rules allow him, if he buys another piece of property like this, to not pay tax yet again.

Why is this allowed? The aristocracy justifies it by arguing that it would "stifle business investment" if the wealthy were forced to pay taxes when they sold property to buy other property, because then wealthy people would refuse to sell property just to avoid having to realize their income, and be taxed. (Of course, the only reason they would have such motivations to hold property in the first place is because of the realization scheme that helps them postpone taxes until sale.)

Thus, the aristocracy argues that postponing tax yet again allows them to buy and sell properties freely (literally "freely," since they are avoiding tax), which helps the economy, which helps everyone. In actuality, it helps the aristocracy to never have to pay tax.

(There are some qualifications to this rule, of course; little technicalities to ensure that only the savvy wealthy whom the scheme is designed for [with lawyers and family wealth planning] can take advantage of it. They are weak qualifications, the strongest being that you have to "reinvest" the proceeds of sale [i.e., buy a new piece of property] within 45 days.)

The larger effects of this theft can be staggering when the reinvestment in similar industry provisions are combined with the realization provisions and the step-up in basis. Here's how it works:

1) The realization provision allows you to postpone paying income tax until a property is sold;

2) The reinvestment in similar industry ("like-kind") provisions allow you to postpone paying income tax even when you sell a property, as long as you buy another property within 45 days;

3) The step-up in basis provisions allow you to eliminate any income tax inherent in an unsold property whenever a wealthy owner dies.

Can you see where this is going? What this system amounts to is a pass to the wealthy against ever paying income taxes at all on their greatest pieces of property. All the wealthy need to do is hold property, watch its value rise, and enjoy the increase in their dynasty's net worth. As long as they wait until the death of a family member, and distribute ownership interests accordingly, the step-up in basis protects each generation from ever paying income tax. And, if they ever want to sell a property without waiting for a death, they simply have to find another noble family in a similar predicament, and switch properties.

This is much of what commercial land deals are: "businesses" (owned by the wealthy, through trusts or other businesses) such as commercial real estate, apartment buildings, etc., being switched back and forth between different dynasties, who each use the transaction as a justification for bringing in IRC 1031 and canceling out any income tax on all the gain they got from the increase in their property's value.

On paper, it seems like two (or a dozen, in a big, happy circle) different businesses are making different investments for the purpose of profitability and bolstering the economy. In fact, the nobility is playing hide the pellet, and is exchanging the properties primarily to wipe out income tax without using the step-up in basis at death. With each new transaction, income is "deferred," and the dynasty can buy and sell and move whatever it wants without tax, until finally someone dies, and the step-up in basis frees up the next generation to do the same thing, without ever paying its fair share to the rest of the country.

Entire industries within the legal, financial services, and property appraisal fields have sprung up to serve these transactions, by generating official-looking paper trails, earning fees, and ensuring that the wealthy families fairly compensate one another for the properties they switch between their respective businesses and trusts. But, the money spent on these middlemen is nothing compared to the vast amounts stolen from the body politic through these overlapping tax schemes.

Succeeded in Part 5.

Tax Theft 3

Continuing from Part 2.

Step-up in basis

The step-up in basis scheme is an even greater theft from the body politic than the estate tax regime. This is because the step-up in basis scheme is a means for avoiding the income tax, which is a tax of greater importance than the estate tax. While the estate tax at first seems like it will be of greater concern to the wealthy, that is not in fact the case: the estate tax taxes the accumulated holdings of the wealthy upon death, while the income tax theoretically taxes their phenomenal gains in wealth built up during each generation's lifetime. Given the combination of inflation, increasing money supply, economic development, and general rises in price and accredited value, which is necessary to water down middle-class savings, the theoretical income tax that can accrue over the decades-long lifetime of a burgeoning lordling can be a great deal more troubling to him or her than the estate tax.

There are, however, many ways of stealing that tax from the masses without having to pay it yourself. An introduction to the concept of basis is necessary to understand how most of these work, including the most devious of all, the "step-up" in basis.

Basis calls for a look at the underlying philosophy of the income tax system. Under America's current income tax regime, "income" is theoretically taxed. However, there is a duality in the tax system that represents the first opportunity for the aristocracy to take advantage. This duality is the split between work and ownership. As ever since the inception of the aristocracy, owning something is presented as more important than working for something. This is because owning is a concept that depends upon human perception, while effort/sweat/labor is a tangible part of the real world. Owning is thus more attractive to the nobility than working, because owning involves doing nothing more than sitting there, while working involves work. Which can be hard and can take effort.

The nobility makes money primarily by "owning" things. For example, Lord/Businessman A "owns" a field. Peasant/Employee B works in that field. During Year 1, Businessman A sits on his ass, while Peasant B works his ass off. At the end of the year, Fruit X is produced. For his ownership, Businessman A receives 90% of the Fruit. For his work, Peasant B receives 10% of the Fruit.

The justification for this system is that Owner has taken a risk by investing his resources (which he, of course, "owned" before Year 1 began, in a dazzling feat of circular logic) in Field. The problem with this argument is that Worker has also taken a greater risk--he has invested a year of his life working in the Field. The justification only works, then, if one views money/resources as more important than life; i.e., it is a ragnarist justification. Nonetheless, this is a tax discussion, not a property rights discussion, so set aside this point for now.

Returning to the amounts of Fruit X received by Owner and Worker in Year 1: both of them have received income, so it would seem that Owner should have to pay a tax on his profits just like Worker.

In actual effect, this is not so. The first way around this is for Owner to make up different systems of tax classification. One of these is called ordinary income--which is the income earned by people who work, like Worker--and aristocratic income (which goes by more docile names in public). Then, you decide that you tax those two types of income at different rates. For example, ordinary income will be taxed at the full, or highest, rate. Aristocratic income will be taxed at a much lower rate.

There are a lot of different types of aristocratic income. One of them is capital gains income. This represents the increase in price of things over time. So, if Owner owns Field G, which he paid $100 for, and ten years later, because of great harvests, Field G can be sold for $500, there have been $400 of capital gains. This is currently taxed at 15%, which is lower than the tax that Worker pays. So, if Worker works for four years, and earns $400 of income, it will be called ordinary income, and he will pay a higher tax on it than Owner will pay on his $400 of capital gains income.

(The net gain to Owner becomes even more apparent in light of the payroll tax, directly levied on only the first $90K of ordinary income each year, and not applied to capital gains or other aristocratic-source income.)

Another clever way that the aristocracy has come up with to classify income is dividend income. Pretend that, instead of owning Field G directly, Owner owned an imaginary person (a "corporation"), called Fields, Inc. Fields, Inc. owns Field G. After 4 years, Fields, Inc. makes $400 of income from Field G. It pays that income back to its owner (Owner), who has $400 of income. However, unlike the income earned by Worker during that time, this is not ordinary income, but rather a special kind of income known as dividend income. And Owner gets to pay a reduced rate on it.

However, this is not even the most cunning part of the scheme. The cunning part is that Owner not only gets to pay a reduced rate on the most important part of his special income (his capital gains), but that he can put it off for a long time. Whereas Worker has to pay his tax right away that year (or the IRS will punish him severely), Owner can wait until he realizes his gain.

This is where basis comes in. The basis of Field G is the amount Owner paid for it--$100. When he sells it for $500, the profit is determined by subtracting the basis ($100) from the sales price ($500) to determine the capital gain ($400).

The discrepancy in treatment comes in when you look at the years before Owner sells Field G. During those years, Field G is going up in value--so Owner has income of that amount. In the first year, it is worth $100--the same he paid. In the second year, it goes up to $200; in the third year, $300; in the fourth year, $400, and in the fifth year, $500. However, because Owner is Owner, and because he is not lowly Worker, he gets to put off paying taxes until his realization event, or the time that he sells the farm/field. Meanwhile, Worker has been earning $100 a year, and has been paying taxes on that every single year.

(Owners rationalize this by saying it is difficult to value the improvement in the field's net worth each year without being able to sell it. The problem with this argument is that it is also difficult for Worker to pay tax. Worker would prefer to use his money feeding and sheltering his family, or perhaps paying for health care or even setting aside some for retirement, and pay his taxes later, just like Owner. However, Owner is the only one allowed to use arguments like that, so Worker has to pay taxes every year, while Owner can put them off until he sells his field (Owners also argue that until they sell the field, they will not have the cash to pay the tax, so the tax should be put off. Workers would like to argue that they are low on cash to pay their taxes, too, but again, those arguments are only allowed to Owners).

Moving right along, the basis idea returns. This one has already covered how Owner does not have to pay tax until he sells his field. But what happens if Owner decides not to sell his field ever, so that he never has to pay the tax? Let's say that during his entire life, he owns the field, and it goes up in value, but he never sells it, never has the realization event, and is never taxed. Does he escape the tax entirely?

Yes. The aristocracy's trick for stealing that money is the step-up in basis. What this scheme does is declare that when someone dies, all their property gets a "step-up" in basis to the market value at the time of death.

So, let's say that Owner bought Field G for $100, owned it for 50 years, then died. During 50 years, it went up a lot in value--to $5,000. That is a huge increase (if you add some zeroes) in wealth, and a lot of income to Owner.

However, Owner is clever. When he dies, he passes Field G to his son, Owner 2. Owner 2 then sells the Field for $5,000. Because of the step-up in basis, Owner 2's basis in the field is $5,000--the market value at the time Owner 1 died--and Owner 2 does not owe income tax.

Congratulations to Owner 1 and Owner 2. By planning over the lifetimes of their dynasty, they have avoided paying income tax on $4,900 of income (add as many zeroes as is required to see how this effects the body politic in a major way, requiring the shifting of the costs of society onto as many lowly Workers as necessary). In the meantime, Worker 1 and Worker 2 (and all their family lines) will be paying income tax on their work, year after year after year.

The best way for the aristocracy to exploit this is to invest their resources each generation, using the death of any family member to be an event for "step-up in basis." With wealth reinvested after each death, the family can realize colossal income, and see its wealth go higher and higher, without ever paying tax on its monumental holdings.

Continued in Part 4.

Tax Theft 2

Continuing from Part 1.

Estate Taxes

Estate Taxes are an effective vehicle the aristocracy employs in stealing money from the body politic. The Estate Tax works, in public theory, by imposing a tax on individuals who die owning a certain amount. The amount is currently $5 million, slated to reduce to $1 million in 2013. Assets owned beyond that amount (let's call it $1 million for purposes of discussing the future) are taxed at a high rate, let's call it 50% (slated to be 55%).

So, if you died owning $1.5 million worth of assets, you would get an exemption for the $1 million, and you would pay a 50% tax on the remaining .5 million. Thus, $500,000 would not be exempt, and you would pay a tax of $250,000. The amount remaining for your heirs would be $1.25 million.

However, this is an unacceptable level of taxation for the aristocracy. In order to avoid paying their fair share, one of the major tools of their trade, as important as the lockpick and dagger to the less well-heeled thief, is the marital deduction. The marital deduction allows someone who dies to give as much property as they want to their spouse without having to pay any estate tax on it. Goodness knows it would be terrible if an aristocrat had to struggle to survive with only $1 million and change.

Aristocrats run into a problem when they use the marital deduction, though: namely, once the surviving spouse dies, all of the money that spouse received from the first spouse to die is in the surviving spouse's estate. That means it is supposed to be subject to estate tax.

So, imagine that Harry and Wilma each owned $1 million of assets. Harry dies and leaves his $1 million to Wilma. Wilma now has $2 million. Because of the marital deduction, Harry pays no estate tax. When Wilma dies, though, she has $2 million. $1 million is exempted using the $1 million credit mentioned above, and the remaining $1 million is taxed. At our 50% rate, that's a $500K tax bill. Harry and Wilma's poor heirs have to make do with only $1.5 million.

Thankfully for the said elites, however, there is a solution to this conundrum, and a way to steal back a lot of that tax bill from the body politic. This solution is called a tax (credit shelter/AB/bypass) trust. These are incredibly common "estate planning" (tax theft) devices used by the minor aristocracy, or those households that have assets in the several (but not dozen) millions. They also represent one of the first and easiest levels of theft employed by the high aristocracy, because of their foolproof protection of several million in assets. For now, though, we will focus on the minor aristocracy (the Outer Party, as it were).

The tax trust solves two problems. It 1) allows the surviving spouse to keep all the money, but 2) without having to pay taxes on the deceased spouse's half (or on their own community property share, depending on the state where they died).

But how can this work? If the estate tax is imposed at death, how do Harry and Wilma get out of having it imposed when they die? The IRS has done its job coming up with complicated regulations that allow for the tax trust to steal money from the rest of America, and keep it for the wealthy, despite the appearance of an estate tax that only actually affects those not savvy or established enough to take advantage of avoiding it. Here's how it works:

Harry dies, owning $2 million. He uses his personal $1 million exemption to shield $1 of the $2 million from tax, which shielded $1 million he gives to an imaginary person called a credit shelter trust. The remaining $1 million he gives to Wilma tax free, using the marital deduction. So, Wilma now has one of Harry's millions in her name, and when she dies, her own credit will keep it from being taxed.

Meanwhile, Mr. Tax Trust owns $1 million. Strangely enough, Mr. Tax Trust has to do whatever Wilma likes. If Mr. Tax Trust makes any money off his investments, or has any other income at all, he has to give it all to Wilma. If Wilma needs money for her "health, education, maintenance and support" (shelter/mansion? clothes/prada? food/salmon? car/mercedes? anything in the world?), then Mr. Tax Trust has to give Wilma any of the original $1 million she asks for. Also, Wilma manages all of Mr. Tax Trust's bank accounts. She gets his statement and carries his checkbook. She signs the checkbook. She decides whether she needs any money for her health, her education, her maintenance or her support, and if she does, she writes herself a check. I.e., illusions aside, it's actually Wilma's money.

Then, when Wilma dies, Mr. Tax Trust pays no estate tax on "his" million, and Wilma pays no estate tax on "her" million. Because, you see, Mr. Tax Trust is a trust, not a real person. So, even though he can do all the things described above, he doesn't have to be responsible to the other taxpayers for little things like the estate tax.

Guess who gets the money from Mr. Tax Trust when Wilma dies? That's right: little Joey, the same heir to Harry and Wilma that was going to get the money in the first place. However, since Joey was exempted from paying estate tax on the money owned by Mr. Tax Trust, his tax bill is now gone. Let's figure it out.

Without Mr. Tax Trust, Harry would give $2 million to Wilma when he died. No tax due because of the marital deduction. Then, when Wilma died and gave $2 million to little Joey, she would use the $1 million estate tax exemption, leaving $1 million to be taxed, resulting in a $500K tax bill, and $1.5 million net to Joey.

With Mr. Tax Trust, things look a lot better for them. Harry gives Wilma $1 million, and Mr. Tax Trust $1 million. No tax due on any of it when Harry dies, because of the marital deduction (for the $1 million to Wilma) and the estate tax exemption (for the $1 million to Mr. Tax Trust). Then, when Wilma dies, we pretend she only has $1 million--not the $2 million she actually has if you are a person who doesn't believe in fairies or tax trusts.

Thus, little Joey gets $2 million tax free from his Harry and Wilma. He (and Harry and Wilma's ghosts) have just stolen half a million dollars from the rest of the country.

This theft only works if you believe in imaginary beings named Trust, who are allowed to hold property, but don't live, eat, breathe, work, or operate under the same rules as human beings. Because Trusts can be complicated to create, lawyers are able to charge between $2K-$10K for creating them. And as a result, every time a tax trust bypasses the estate tax, elites will steal ~$500K from America (depending on the applicable tax rate).

Why does this work? Because of the fact that, as previously discussed, imposing tax burdens on "everyone," and then exempting only certain people in complicated ways, does not feel as much like theft to the victims. When the masses believe they are paying their fair (or reasonably fair; "everyone cheats a little!") share of taxes, as opposed to writing checks directly to people with millions of dollars in their credit shelter trusts, they are less likely to make trouble about it.

The avowed purpose of the estate tax is to ensure that the immensely rich have their massive fortunes gradually broken down, so that the wealth can be spread around the economy for investment, economic growth, and the benefit of the body politic. The core idea is that any amount over $1 million (or whatever the "exemption amount" is later called by the wealthy Congressionals) should be taxed before it can be passed on for continual hoarding: even when passed between individuals who happen to be economically united in two-person Judeo-Christian marriage. However, the tax trust scheme allows the aristocracy to bypass the individual exemption amount, and double it for those (wealthy) people established and clever enough to dodge the regime that everyone else has to live through.

Succeeded in Part 3.

Tax Theft 1

This series explores how tax policy exploits money from the body politic. A few introductory notes are in order.

Firstly, the concept of theft through taxation must be understood. It does not mean that all taxes imposed by government(s) are thefts in and of themselves, or that all or any taxes are wholly acts of thievery/extortion. Rather, it implies a more advanced system of thievery where taxes are imposed upon everyone, and tax-exemptions allow select individuals to "avoid" taxation. Thus, the individuals who do not avoid taxation have been robbed, in the sense that they have had money taken from them based upon a concept of fairness, which concept is unfairly applied. More importantly in the aggregate, the body politic has been robbed, because it has not received its theoretical due. Everyone within the taxpaying community has been stolen from. The robbery does not occur through direct physical force most of the time, because most people pay their taxes rather than go to jail, however, the theft becomes extortion when the unfairness of the tax regime is enforced by armed sheriffs when necessary.

Example: suppose that in Town A, there exists Individual Z and Individual Y. Tax is imposed upon all individuals of $50. If Individual Y comes up with a strategy whereby individuals named "Y" do not have to pay their tax, then the body politic has been robbed of $50. Individual Z pays $50, while Individual Y pays nothing. The body politic would have received $100 total ($50 each from two individuals) but instead it receives $50. The body politic has been robbed.

Similarly, Individual Z has been robbed of $25. Let us say that the tax was imposed because $50 was required to run Town A for the fiscal year. Thus, Individual Z and Individual Y should each have paid $25. However, because Individual Y avoided his tax liability of $50, Individual Z had to pay the entire amount. He was thus robbed of $25.

The aristocracy in America employs direct tax theft to extract resources from the masses using the techniques described above. They do this because it is much easier to get money from people by pretending that everyone owes taxes, and then exempting the aristocracy from them in complicated ways that most people do not understand, than it is to enforce open, acknowledged tithes to their authority. As a result, most people have a general sense that things are unfair, but they cannot figure out how, and feel less emotionally slighted. Thus, violent conflict is postponed or avoided.

Succeeded in Part 2.

Tuesday, October 18, 2011

Democratic plan to block birth control

(Reposted from 09/2008)

I have uncovered details of a new, publicly-announced governmental act that will prevent women in numerous foreign countries from having access to birth control, or indeed, sexual freedom of any kind. This heinous plan is actually put forth by the Democratic Party and Barack Obama. Any true feminists need to instantly speak out against it, and pledge that they will refuse to vote for Barack Obama unless he instantly denounces this plan!

This plan involves deploying the U.S. military to Afghanistan and Pakistan, where it will pursue alleged "terrorists." While doing so, it will use so-called "precision strikes" to destroy the uteruses, bodies, and entire reproductive systems of these innocent women. One small example of this phenomenon is this mass murder of innocent women in Afghanistan.

Actions like these will have the obvious effect of denying these women access to birth control. And, since it involves killing them, it is much more important that we crusade against this denial of their right to birth control than we do against, say, a local pharmacist refusing to grant birth control to an American woman, so she has to drive across the street to get it.

Who's with me? Who will take a stand against Barack Obama and his hideous plan to deny birth control and reproductive freedom to the women of the far east?

Daily Confucius

In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.

Sunday, October 16, 2011

Unnecessary Steve Jobs link

In loose company with the recent discussion of the greatness of certain billionaires, Perdido Street School, along with a pre-death citation to the Telegraph, offered a summary of the ways Mr. Jobs turned the screws on the more vulnerable members of the species: here.

This is a "different playing field" from those poor, typical humans that the rest of us are--but in a way, it's not. Billionaires need to keep fighting, because if you're not growing, you're going. Under an economy with death-by-starvation at the bottom, and no human guarantees, even $8 billion isn't enough to make you feel secure. Even the winners aren't the winners--and if it takes crushing children to make that next G, they'll do it.

A hundred years ago, or at least 80, Americans began to perceive that the massively wealthy, whatever their claims about philanthropy and superiority, were not behaving very nicely. The quest of a generalized understanding of this--if ever begun--has thus far failed.

Even superwealth does not yet insulate from the human condition. The same poison from the runoff of industrialism has worked its way into the mortal shell of plenty of the winners, lending years of pain and early passings. Poetic, ironic, appropriate and terrible at once. Eventually, they'll develop their sealed spaceships, and more woe betide those left behind--but what chaotic wonders might follow them on board? Only time has told.

Friday, October 14, 2011

Gay marriage for cash!

In a country that congratulates itself on PC behavior even in action movies, why is "gay marriage" still an issue of contention? All of the obvious memes reinforcing the black-guy-white-guy buddy shoot-flick cut toward generally not having a problem with it.

Yet, "problem," or rather, obvious cultural inequity persists.

The simple answer to the why of that persistence is "crazy religious (and/or repressed) people just get in the way of progress." Which begs the question of "what progress," raises questions of the American exceptionalist trend to view all history as a gradual improvement caused by America, and will henceforth be stricken from this record.

Of course, those same crazy religious/repressed people would, if actually running things, still have women out of the proverbial workplace, allow open racial discrimination in restaurants, et cetera. They don't get away with that, but they're allowed to keep stonewalling gay marriage. Why?

Taxes! Or, more fundamentally, a cool,* complex scheme of antilife financial manipulation that entrenches established order (*in the Machiavellian way, of course! You have to appreciate a good scheme!).

(Antilife? Yeah. Why is being against teh gay antilife? Because sexual behavior and deviation of any kind tends toward life, being of the exploratory, chaotic nature of love, lust, pollen on the wind, and so forth. Right now, the typical "anti" meme is, "They can't have kids," which prejudiced asexual divide-to-reproduce cells would've once slurred at the first sexual cells that went off to swap DNA.)

After all that ado, here lieth the real reasons the plan works/is allowed to continue:

1) Offspring control. Marriage, which once blended well with patriarchy, chattel slavery and parental caste authority--and which still has a cozy, non-dependent relationship with all of these--is, in the neoliberal age, a creature of economic contract. Marriage allows two earning adults to invest economically in one another, ensuring that each of their selfish genes can be passed on in the context of a commitment that's painful (actually painful in the modern world, i.e., expensive) to get out of. This serves to reassure cash investors in a biological future, much like a shared investment of venture capital ensures two business partners that the other person has some "skin in the game."

As standardized rules for the rights appurtenant to corporate stockholders facilitate secured trading on international exchanges, standardized marriage offers to all conforming straight people the ability to invest, at a reduced, government-subsidized cost, in a standard, recognized, court-enforced lifelong contract. Widespread social recognition of the contract reduces entry costs for participants. Denying this privilege to non-straight non-cisgenders subtly increases the economic instability of all unions they might create outside of the established more.

2) Retirement planning. The increased cost and instability of non-recognized unions makes it more difficult for LGBT individuals to plan for the future. In the zero-sum game of the neoliberal capitalist economy, an individual contemplating a shared relationship needs economic protection. How?

Like all things human, efficient relationships benefit from task-sharing: "You do the dishes, the laundry, clean the front yard, feed the dog, manage the finances, and I'll go to work." Zero-sum economics makes it profitable for an individual to take advantage of another by riding out the relationship through an expensive education, an economic recession, or the productive life-years, then bailing without returning the investment that the working half made.

Default marriage guards against this with both social consternation (continuing to become now less influential) and economic balancing tools, such as alimony, spousal support, various forms of "marital property," and other protective provisions for screwed partners. By reinforcing the negative consequences of severance, these increase the security of each partner in a shared commitment, and allow for the easier initial investment. Denying this sanction to LGBT unions (as well as larger-than-two unions) increases their investment risk, making such unions, as compared to "traditional" ones, harder for any given individual to contemplate or deal with.

3) Inheritance, Child and Medical Care Planning. Legally-recognized spouses have all sorts of other nice default benefits provided by the tax base as a whole, including the ability to: act in some fashion as a health care agent and receive health information for the other spouse without expensive or complicated paperwork; inherit from a deceased partner without yet-more-expensive paperwork; utilize default court-recognized power to care for a disabled partner (rather than being utterly blanked out of the system), and act for the protection of another's physical or adopted child (formally recognized or informally countenanced, depending on the situation). "Traditionally" (giggle! snort!) married couples also receive astronomical estate and/or inheritance tax benefits (see upcoming "Tax Theft").

So, there it is: yet another complex, convoluted economic scheme designed possibly by knowing elites and possibly by a small combination of the latter and a large concentration of the subconscious antilife in we all.

(Which, all things considered, does not make it as weighty a world concern as the more direct applications of violence to those who don't have the privilege of facing mere economic discrimination.)

Thursday, October 13, 2011

Different frequencies - On Brilliance, Part 2

Continuing from Part 1.
Like any vivid metaphor...it is simplistic in that it treats non-conforming cases as marginal issues. Perhaps Jobs is just one of those "suddenly rich" who have to be then indoctrinated into the system -- except that this forces the biographies of countless such ingenious people, at great strenuousness, into a counterfactual mold.
In defense of literary concept alone, vivid metaphors would be so guilty if they claimed to be absolute--i.e., to explain every single occurrence possible. Before broaching the metaphor of the "hill," though, this one will restate the explanation in short form:

Elites control the world financial markets, ensuring their continued ability to exert power over the rest of the world. Through the use of a system of monetary exchange sold as a fair and impartial trading method, they rationalize their own power, and the lack of others' power, as a result of them having certain numerical quantities of money, and others having lesser numerical quantities of money. Occasionally, through operating within this system, people are able to accumulate numbers that might elevate them to the ranks of the elite. Too many elites would diminish the power and influence of the upper caste. Therefore, the numbers ascending to that caste must be regularly limited.

The narrative, here, was applied to the "housing crash" of 2008 (pick your year). Some things the narrative did not say:

1) Every elite (or even any!) was conscious of this plan, as expressed above.

2) Every wealthy person is behind it and/or benefited by it.

Every person beating their spouse/child does not know why she or he does it, even if she or he is able to express the reason(s) well. A woman may strike her husband because she was struck and emotionally abused as a child, and still bears the scars on her soul; a man may commit serial murders because he was raped as a boy; a woman may be afraid of heights for a reason she can't figure out lacking hypnosis or deep therapy.

This was a very clever, very detailed "plan." Nationwide, almost all the major banks began dropping lending standards, hiring less experienced people, requiring less collateral, et cetera. At every stage of the process, from realtor to broker to bank officer to legal department to government agency, hordes of people participated in the ritual, approving ridiculous "housing loans." This occurred in tandem with media blitzes pushing the virtues and savings of home ownership, much like the NYT was all ready with WMD scare stories when it came time to kill Iraq again. The rush of demand for housing pumped up prices, making loans even less theoretically viable, yet the loans kept coming, and the prices went higher. Experienced financial professionals begged their clients to offer more than the list price for real estate, to ensure that the offer would be accepted before someone else bought the property on day one.

Just like the invasion of Iraq led to massive sectarian violence, underground civil war, and regional instability, the effects could have been predicted, and may have been planned for specifically by malevolent figures, which doesn't necessarily (or probably) mean that everyone involved in invading Iraq was cognizant of what the effects would be. Things can and do happen to keep well-regulated systems running, even if the left hand doesn't know what the right is doing. However, as Mannheim might say, they keep the system running because it benefits them, whether they fully, consciously know the most minute details of how it benefits them or not.

Once the loans began to default and the price spiral started to turn around, people lost their homes, lost their jobs, lost their retirement planning, et cetera. Accordingly, "demand" (rather, ability to afford) for everything else dropped, and the rising upper middle class was washed back down. It worked really well, in a Machiavellian way--especially because the banks who middlemanned the "crisis" ended up getting to not only repossess all of the houses, but also to garnish wages for years on full-recourse mortgages.

To use the provided example, each individual elite, or a mystical Illuminati somewhere, were not (maybe!) cackling around a fireplace detailing this fully ahead of time. Like slapping a child in the face because a nugget of irritation buried in the soul forty years ago, the systematic binge and hangover does not always have a traditional explanation in the sense that Ben Bernanke might confess to it while being waterboarded. This is what people did; this is how they did it; this is how so many were hurt, in varying levels. The mystery of the why the elites would hurt not only the rest of the world, but also themselves, is found elsewhere, here. More discussion on the "why" when this one goes on to Stage Fourth, later.

All that said, don't fall into the "zomg conspiracy theories!" trap. It isn't so hard to believe, is it, that somewhere, out there, someone is planning to make money? If you wanted to make a lot of money, and stay king of the world, how would you go about stopping anyone else from climbing the hill? You can't blatantly declare your intentions. If you invade a country, it's for humanitarian reasons. If you relax lending standards, it's to help good, hardworking people find homes. If you evict them, it's because they didn't pay the mortgage, and you have a business to run, employees to pay, and stockholders to answer to. If you then take tax dollars from those same evicted people, and give them to the bankers (ultimately, the elite stockholders of said bankers, who may or may not hold a position on the board) who manufactured the crisis, it's because you're benefiting the poor in the long-run by keeping afloat banks that those people need to live, which are too big to fail. You never say, "I want the money! And I'm gonna get it!"

Somewhere, out there, someone is trying to get money. The guy bagging your groceries at the supermarket is trying; the guy fixing your car is trying; the guy flipping stocks is trying; the guy whose financial adviser pays other people to buy securities in companies that hire people to evaluate stock flipping is trying. That's the nature of the jungle civilization, where economic failure is underwritten by homeless starvation or freezing to death.
[I]t is written from the perspective of ignorance -- of an outsider looking enviously in. Does Arka really know what issues attend the lives of the super-rich? Is it true that there is no existential difference between a net worth of twenty billion and twenty million? One or two examples from Arka's personal acquaintance would have aided his/her case...we can be non-producers at all levels of income. You see how story-book the thesis gets?
(Before continuing, this one will say two things to the former part of the selection: firstly, depending on the definition of net worth qualifying one for super-rich, yes; secondly, super-rich net worth, as part of the aforementioned monetary charade, tends to be defined by power over companies, i.e., power to control the lives of others and shuffle assets owner through a variety of legal entities, rather than just a liquid account with a bajillion dollars in it. Thirdly, and far most importantly, humans can and should trust one another to comment on something without having "been there." To employ Godwin's Law, as inevitably must be done, the illustrative question is, "did Hitler do bad things?" with the follow-up being, "have you met him or any of his advisers?" This ability of humans to understand and think about things they haven't yet fallen into is why a little girl who writes a letter to the president asking him not to kill anymore people is more right than every one of the president's advisers.)

Onward! The lack of difference between twenty billion and twenty million deals in the fact that, as humans, and not having yet purchased immortality of the singular ghost expression (as far as general culture appears to know), we each only have one human lifetime, filtered through one set of human sensory organs, from which to benefit from "money" and the things it can acquire. And part of that time, you're sleeping. This is the law of diminishing returns, which it is perfectly appropriate to use against economic elites in the land of the invisible hand. $5 means more to the starving kid in Africa than to the harried single mom in America; $100K means more to the said single mom than to the corporate lawyer; $10 million means more to Ice T than to Bill Gates.

Just as there is a world of difference between reading Dune and watching Seinfeld, there is a world of difference between twenty billion and twenty million, or between one million and two. It would be cool to be able to buy islands, commission thereupon colossal cotton-candy sculptures in the Easter Island style, then light them on fire and pay an astronaut to take pictures of them from space. It would be cool to own a one million square foot house--or twenty of them! It would be cool to pay homeless people $10K each to dress in drag and stage a transvestite pride march on Washington.

At a meaningful human level, though, the use of the economic cutoff point was to discuss the secure fulfillment of human needs. Shortly put, with more another time, inflation is one of the price manipulation tools that serves as a background elite protection strategy. Here's how it works, again, shortly put: constantly, slightly devaluing money causes accumulated holdings ("savings" or "IRAs" or whatever you like) to become worth less over time, unless they are invested in the stock market. The stock market serves two cool purposes: firstly, investing in minority shareholdings (now even more cleverly diffused through mutual funds) places funds in the control of majority shareholders, and secondly, it subjects holdings to the cyclical dropouts of the market, like the overflow drain in a tub.

If you pull out of the investment trap, and go for something "safer," you don't get an interest rate that can beat inflation, and you and your heirs gradually decrease in net worth. The only way to stay out of this cycle is (1) to work, i.e., to labor for the ownership caste, producing things of value in return for numbers allotting you potential survivability, or (2) to have so much money that your investment earnings can not only outpace inflation, but increase principal sufficiently to ensure the future outpacing of inflation, and also, to have so much that you can still live exceedingly well during any necessary stock crashes.

(In terms of one lifetime, this isn't always easy to follow, but think dynasty, which is how elites are so successful, economically speaking.)