Variations on a Theme

There has been a lot of scaremongering over the possible variations of progressing the tax code, like increasing the capital gains tax. It would be progressive because most of the wealth (at least 70% owned by the top 10% of incomes conservatively stated) is held in the form of value that produces a capital gain without economic growth. It just keeps churning the wealth in stagnation to be consolidated at record, and crisis, levels.

If the trend to general crisis is to be reversed, the solution, a more progressive tax code, is readily apparent and easily applied.

Conservatives want to maintain the regressive tax code because, they argue, capital will flee to a more favorable code which will result in a deficiency of capital and therefore economic growth.

In case these conservatives haven't noticed, a deficiency of capital and economic growth (the liquidity crisis and stagflation) is what we have now. Achieving the legitimate result of the conservative argument clearly requires its antithesis.

Conservatives therefore argue a variation of the progression that favors the wealthiest investors (a measure that defines a class distinction compatible with the Hamiltonian model). Requiring a high reserve requirement for commodities speculators they argue, for example, will immediately lower the price to consumers to a more fundamental level.

Raising the reserve requirement raises a barrier to entry based on your income, which is the problem in part and whole, not the solution. So we have the classic example of elites offering a reorganization of the problem as the solution. Raising the requirement removes the magnifier effect of a marginal momentum of a "class" of retail trageurs that are at the mercy of the market movers (the illegitimate commanders of a so-called free-market economy) that chase the momentum because they cannot affect the bid in a free-market manner.

Eliminating the marginal profit maintains the proportion of inequity--the disparity of income by means of a regressive burden of the margin requirement. The gross income is much less important to the Hamiltonian model than maintaining the proportion of inequity. Where the inequity is reduced, the money to finance it is printed, or monetized into a public debt to be paid with a regressive tax burden, increasing the total money available without reducing the proportional inequity.

Just a very simple progressive code on all incomes of every type cures both the problem of an inequitable burden and the complexity of regressing the code. The means to ends legitimacy of the code is rendered more easily verifiable.

If it is necessary to control the market-price distortion of a consolidated capital on futures markets that are intended to hedge a commodity and stabilize the price for the end user (a non-speculative demand), a "classification" of the capital gain is in order. There are other classifications of capital gains. There is no reason why this kind of classifier cannot be applied to a highly inflationary distortion of the market price by taxing the gain into a disincentive. It is an adjustment for a negative externality (general inflation) that is easily accomplished and effective, just not popular with the conservative element because it is a highly effective way to consolidate wealth and power by indirect means.

A more progressive tax code with a few special classifiers is clearly in order and easily executed.

Very best wishes.