The 3% Wealth "Tax"

     They call it a tax.  It isn't.  It's confiscation.  A recurring annual confiscation.  To better understand the malevolent 3% wealth "tax" one commie nut job has just put out there, we've targeted the 1966-'82 period, another time investors were strongarmed into covering the deep state's gross fiscal malfeasance for them.  Consumer prices rose 297.84% over that period, castrating the fixed income crowd by that factor and crippling interest derived from the debt component of balanced portfolios, de rigueur throughout the investment community in the 60's.  Many folks victimized by the Great Depression had refused to own stocks ever again, hence got fleeced once more, this time by Lyndon Johnson and them through the horrific guns-and-butter economic catastrophe devastating buy-and-hold bond investors throughout the seventies.

  What would've happened if some fruitcake of that day had thrown a 3% annual confiscation in on top of all they'd already done to break the backs of decent, responsible, God-fearing American patriots like us way back then?  Let's focus on the nation's bondholders for this one.

     An investor with $100 million in Treasury bonds, considered the safest investment in the world in 1965, might have been earning $4.5 million on a 4.5% coupon as 1966 began.  Burgling this victim at 3% a year can be looked at in two ways.  Government stickup artists are either 1) clipping his/her/their/whatever income by $3 million in 1966, leaving the unfortunate(s) with $1.5 million before income taxes and less and less each year thereafter, or 2) looting principal, chopping net worth down to $97 million at the end of 1966 and by 3% annually thereafter, which is the intended outcome as stated by the above-referenced nut job, thereby purloining income along with principal as bonds are sold off each year to meet the confiscations.

     Either way, that $100 million bond portfolio collapses to something like $48.7 million at the end of 1982, lowering income to $2.7 million from $4.5 million, while inflation cuts that ending income to the equivalent of $900 thousand in 1966 dollars.  Going into this tragic fiasco, the victim(s) held one hundred thousand bonds.  Forty-two thousand were plucked off by G-men, leaving the portfolio with 58 thousand after the 1982 confiscation,  Had there been no wealth "tax", the victim(s) would still be holding the original one hundred thousand bonds.

     Clearly, adding a 3% malevolent wealth confiscation to the 1966-'82 years destroys families, who basically are forced into paying Washington fruitcakes to go on and wreck more and more American lives with their treasonous evil ways. 

     

The Wealth Tax

     Valued subscribers, upon reading that math-challenged deep state politicians look to confiscate some part of your nest eggs with what can only be described as a malevolent tax on the Trump-supporting family's financial gonads, MacDougal sprang into action.  Sobered up from that regretful escapade, his first actual constructive thought returned the intrepid blogger back to those calamitous guns-and-butter days of, we'll call it, 1966-1982 when the budgetary shenanigans of Lyndon Johnson and them took us off the rails and the train of state never did get back on track until the Great Ronald Reagan jumped out from your neighborhood silver screen to save the day the way all our real heroes do, with bravado and figurative guns ablazing, and she started chugging properly again.

     Now, MacDougal would like to drag you back there with him, probably kicking and screaming if you remember the seventies at all.  What would've happened to the old financial gonads if some commie fruitcake had imposed a malevolent wealth tax on Eisenhower-loving families then?

     The numbers turn out to be chilling, but we're going to throw them at you anyway.  With a 60% rate, over the 1966-1982 period the malevolent wealth tax on an investor's beginning $100 million portfolio would've left its victim with $7.42 on Dec 31, 1982.  Let there be no mistake here.  That's seven dollars and forty-two cents.  A one hundred million dollar net worth becomes seven dollars and forty-two cents the last time fruitcake politicians went crazy bananas with taxpayer money if you toss a malevolent 60% wealth tax in on top of it.

     We've got a poopload of appropriate assumptions and methodology behind our conclusions, 1) yearly changes in the year end Dow Jones Industrial Average and 2) taxing values as of those dates prominent among them.

     You say 60% is extreme.  Is it?  MacDougal's father paid a 95% marginal tax rate at one point in the sixties, and he wasn't exactly alone.  You say it won't apply to everybody.  It won't?  Check out early discussions of the income tax.  Any income tax.  Heck, check out anything politicians do.

     Seven dollars and forty-two cents.

      At a 50% rate, the malevolent wealth tax leaves our $100 million man with $411.88 at the end of 1982.  Let's jump all the way down to 30%.  That turns into $175 thou.  To someone worth $100 million in 1966, $175 thou in 1982 is the kind of number you jump out of windows over.  At 25%, the malevolent wealth tax leaves $608 thou.  If you've never had $608 thou, maybe you won't understand this, but the best our $100 million man could say about $608 thou, is "at least I can afford to go out and get a gun over this".

     A 15% malevolent wealth tax on an investor holding $100 million in assets as 1966 began would've left him/her/them/whatever with $5.7 mill as 1982 ended, 10% reduces all that wealth to $16 mill, 5% to $43 mill, and 3%, the rate one fruitcake has proposed, drops $100 mill to $62 mill.

     Finally, and we promise not to put you through any more of this abuse once this last paragraph is finished, there isn't a sentient investor on the entire planet who isn't expecting a '66-'82 style period of reckoning to occur to somebodies somewhere sometime as a result of the gross financial mismanagement governments across the globe have foisted on their populations in the name of globalism and whatnot since at least 2008, and we are confident that the years chosen to be used above will be proven proper for this analysis at such time.