This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The Billionaires vs. the Millionaires

NEW YORK ( Bullion Bulls Canada) -- Warren Buffett was at it again recently, telling anyone who would listen about the need for a "millionaires tax" in the U.S. However, while the Corporate Media was (as usual) heaping praise on Buffett, the reality is that Warren Buffett is not being "magnanimous", he's being disingenuous.

Why is Warren Buffett so adamant about the need for the Tax Man to start squeezing the millionaires? So that he (and his billionaire Oligarch-buddies) can continue to avoid paying his fair share of taxes.

Buffett knows that everyone below the level of millionaire has already been squeezed dry. Buffett knows that the U.S. is drowning in debt, and (in real dollars) tax revenues have totally collapsed .

So unless the U.S. government comes up with a new source of revenue (and fast), Oligarchs like Buffett are facing a grim future. Either their entire Paper Empire will disintegrate in a wave of domino debt-defaults, or the exponentially increasing money-printing needed to "fund" exponentially rising deficits will quickly trigger hyperinflation -- also taking their Paper Empire to zero.

As regular readers know, it is impossible to ever construct a "fair" system of income taxation . As a basic proposition of arithmetic, all income tax systems slowly but inevitably funnel all wealth out of the pockets of the bottom-99% and into the vaults of the top-1%. I've explained the mechanics here before, but since this obvious concept has still not been grasped by most readers I'll explain it one more time.

For the poor, annual income represents nearly 100% of their total wealth. For the dwindling number of the Middle Class, annual income still represents a large percentage of their net wealth. However, for the average billionaire, income represents less than 5% of their total wealth. Even if billionaires had their own income taxed at a 100% rate, they would pay a much smaller percentage of their total wealth in taxes than one of the Little People, being taxed on their income at only a 25% rate.

Unlike the rest of us, most of the increasing wealth for these billionaires does not come from income. Rather, it comes from the untaxed appreciation of their hard assets: their mansions, their yachts, their antique paintings. Just imagine how the dread which the Little People have for Tax Day would instantly evaporate if they knew that as much as 95% of their wealth would be immune to any taxation, throughout their entire lives.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,614.81 +215.14 1.31%
S&P 500 1,941.28 +37.27 1.96%
NASDAQ 4,419.4780 +103.4040 2.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs