FORECASTS & TRENDS E-LETTER
by Gary D. Halbert
July 6, 2021

IN THIS ISSUE:

1. G7 & Congress Propose Draconian Tax Increases

2. US “Wealth Tax” to Confiscate Assets of the Rich

3. “Critical Race Theory” Is Perverse, Leftist Worldview

Overview

G7 & Congress Propose Draconian Tax Increases

The socialist, globalist left’s ongoing effort to target and confiscate private wealth has crossed two major thresholds this year, bringing closer a future in which no person or business is safe from the prying hands of the world’s governments.

In one historic milestone last month at the G7 meeting in England, world leaders – including President Biden – endorsed the creation of a new worldwide tax regime, starting with a 15% “global minimum tax” on all companies. In a second key development, Congressional Democrats here in the United States are picking up steam for their proposals to impose a so-called “wealth tax” on American citizens, a tax based not on income, but on taking away a share of an individuals’ total net worth.

Taken together, these two measures represent a significant escalation in the progressive crusade to dramatically increase taxes and even confiscate private property, while ensuring there is nowhere else businesses or individuals can go to avoid the higher taxes.

The G7’s proposed global minimum tax would require all participating countries to impose a 15% levy on businesses headquartered there. While this initial rate is significantly lower than the current business tax rates in many developed countries, the goal is to eliminate the competitive dynamics that cause those countries to keep their tax rates relatively low.

For example, Ireland’s 12.5% corporate tax was specifically established to attract overseas businesses, providing a significant boost to the Irish economy. This is the phenomenon the governments of the world are seeking to kill – presumably so they can eventually raise tax rates to a much higher level than the current system of competitive global commerce will sustain.

Indeed, the Biden administration is already seeking to raise business tax rates in the United States from 21% to 28%, and in so doing they face criticism that higher taxes will only succeed in driving businesses to lower-tax countries overseas.

The New York Times reported last week that 130 countries worldwide have already agreed to a 15% global minimum tax, according to the Organization for Economic Cooperation and Development (OECD). That’s really scary!

Moreover, once a global tax regime is established, it will almost certainly grow beyond merely a 15% minimum tax for businesses. It would then only be a matter of time until the same global bureaucracies seek to globalize other kinds of taxes, from income taxes to sales taxes, to potentially new forms of revenue collection that do not currently exist in the United States.

New US “Wealth Tax” to Confiscate Assets of the Rich

Exactly such concerns point us to the second major milestone the socialist, globalist left has achieved this year – mainstreaming the idea of a “wealth tax.” Last month, House Ways and Means Committee member Rep. Thomas Suozzi (D-NY), revealed that he and members of his party are “exploring” a one-time tax on wealthy Americans to pay for the new spending priorities of the Biden Administration.

The so-called “Patriot Tax” would confiscate 2.5% of the wealth of an individual whose net worth ranges between $50 million and $100 million, increasing to 5% on wealth above $100 million. Rep. Suozzi insists this would be a “one-time measure” to help rebuild post-pandemic America. Yet rarely in history are entirely new categories of taxes ever phased out after being introduced.

While the concept of a one-time payment is new, progressive calls for a wealth tax have been percolating on the left for nearly a decade – since left-wing French economist Thomas Piketty released his work Capital in the Twenty-First Century in 2014. Piketty asserted that, without government intervention, wealth would inevitably concentrate with the richest individuals.

Interestingly, considering the news out of the G7, Piketty’s solution was a Global Wealth Tax of 2% on all existing wealth, in addition to a progressive income tax that would reach 80%. Yikes! One Washington Post columnist celebrated the work for “picking up” where Karl Marx left off.

Despite numerous issues raised over the accuracy and assumptions of Piketty’s conclusions, and the fact that the author himself believed a global tax would be “politically impossible,” based on the current state of the Democrat Party in 2021, the notion of a global wealth tax seems much less far-fetched than it did in 2014.

Earlier this year, Senator Elizabeth Warren along with Senator Bernie Sanders introduced the “Ultra-Millionaire Tax Act” which would impose an annual 2% tax on wealth over $50 million. While neither Warren’s bill nor Souzzi’s proposal is currently regarded as likely to pass, their existence shows that the idea has ascended to the realm of mainstream support within an increasingly leftist Democratic Party.

A recent analysis by the Tax Foundation concluded that a wealth tax would reduce the “long-term GDP” of America by 0.37% annually, while others (including me) believe it could be much worse than that – and it could more than double the trade deficit. While the Tax Foundation’s analysis is hypothetical, there are plenty of real-world examples which highlight other shortcomings and negative effects of a wealth tax.

As of 1990, 12 European countries had imposed wealth taxes on their citizenry. As of 2021, only three remain. Let that sink in! Put differently, nine of the 12 nations which imposed a wealth tax found it so bad for their economies, they repealed it.

Among the most significant practical challenges is that many, if not most, people have a majority of their wealth in assets which are not easily convertible to cash in order to pay the tax. For example, farmers may own millions of dollars’ worth of land and equipment but have little cash on hand. To cover the wealth taxes they would owe on such assets, they would be forced to liquidate the very assets their families or businesses rely on.

Facing such choices in Europe, the best option for many was simply to move to another country. Should the G7 leaders see their global minimum tax realized, however, there will be a clear precedent for overcoming that problem, paving the way for the global wealth confiscation campaign Piketty dreamed of, but thought impossible.

“Critical Race Theory” Is a Perverse, Leftist Worldview

According to the establishment media, opposition to “Critical Race Theory,” or CRT, is simply a distraction. It is a right-wing-driven smear campaign. It is a conservative attempt to quash the dark side of American history.

Most of all, according to the establishment media, you must never – ever – pay attention to the infusion of CRT into the nation’s institutions of power. According to MSNBC’s Chuck Todd, controversy over CRT is a “creation … it keeps people watching or it keeps people clicking.”

According to CNN’s Bakari Sellers, CRT is just “America’s history.” According to The Washington Post’s Jonathan Capehart, those who criticize CRT are merely attempting to prevent “us from learning our [true] history.”

Critical Race Theory, of course, is NOT America’s actual history. It is a perverse worldview, unsupportable by the evidence, in which all of America’s key institutions are inextricably rooted in white supremacy (racism); it is an activist campaign demanding the destruction of those institutions which made America what it is. That is, the greatest nation in history.

The founders of CRT have written as much.

According to CRT founders Richard Delgado and Jean Stefancic, CRT is founded on two key premises: that “racism is ordinary, not aberrational — ‘normal science,’ the usual way society does business, the common, everyday experience of most people of color in this country”; and second, that “our system of white-over-color ascendancy serves important purposes, both psychic and material.”

This means, according to Delgado and Stefancic, that “racism is difficult to cure or address” and  a formal commitment to legal equality on the basis of color-blindness is merely a guise for “further discrimination.”

Furthermore, CRT founders say that whites are unable to understand racism – meaning we are all racist, whether we realize it or not. And that “minority status … brings with it a presumed competence to speak about race and racism.”

CRT therefore holds that racism is embedded deeply in American life, unconsciously into white American psyches, and it is impossible for white Americans to understand their own racism or that of the system, let alone to remove it.

The only solution: tearing away the very systems which have ever provided widespread liberty and prosperity. As fellow CRT founder Derrick Bell wrote, “The whole liberal worldview of private rights and public sovereignty mediated by the rule of law needed to be exploded.”

CRT isn't merely a tool of legal analysis, either, as many of its supposed dishonest defenders claim. Delgado and Stefancic are clear:

"Although CRT began as a movement in the law, it has rapidly spread beyond that discipline. Today, many in the field of education consider themselves critical race theorists ... Political scientists ponder voting strategies coined by critical race theorists ... Unlike some academic disciplines, critical race theory contains an activist dimension."

So, what has CRT accomplished? The near-complete subjugation of our higher educational system, which now traffics regularly in CRT-related themes; the corruption of our establishment media, who parrot the anti-Americanism of CRT as "just history"; the infusion of CRT into nearly every area of the government, under the Biden-esque newspeak of "equity."

And yet, if Americans notice this – if Americans lobby school boards to bar indoctrination in the cultish nonsense of CRT – these institutional actors tell those Americans there is nothing to see and thus the controversy is unfounded. Yeah, right!

The grassroots pushback against CRT is rooted in the best of the American tradition: a rejection of racial essentialism in favor of individualism, an enthusiastic endorsement of agency rather than determinism, a willingness to stand united against tribalism.

The bottom line: We all ought to fight those who have hijacked and weaponized our institutions against all of these traditional American ideals. Anything less would be an abdication of the trust we have been given – a trust that has resulted in liberty, equality and prosperity beyond imagining since this great nation was founded.

Wishing you freedom and liberty,

Gary D. Halbert

SPECIAL ARTICLES

Global Minimum Tax Refused by 9 Countries, Complicating New Deal

Why “Wealth Tax” Is Not a Solution For Income Inequality

Gary's Between the Lines Blog: US Home Prices Soar To New Record – No End In Sight

 

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