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To Be Sustainable, Green Energy Must Generate Adequate Taxable Revenue

To Be Sustainable, Green Energy Must Generate Adequate Taxable Revenue

What allows any type of energy to be sustainable? I would argue that one of the requirements for sustainability is adequate production of taxable revenue. Company managements depend upon taxable revenue for many purposes, including funding new investments and paying dividends to shareholders. Governments depend upon taxable income to collect enough taxes to provide infrastructure and programs for their growing populations.

Taxable income is a major way that “net energy” is transferred to future investment and to the rest of the economy. If this form of net energy is too low, governments will collapse from lack of funding. Energy production will fall from lack of reinvestment. This profitability needs to come from the characteristics of the energy products, allowing more goods and services to be produced efficiently. This profitability cannot be created simply by the creation of more government debt; the rise in the price of energy is tied to the affordability of goods, particularly the goods required by low-income people, such as food. This affordability issue tends to put a cap on prices that can be charged for energy products.

It seems to me that Green Energy sources are held to far too low a standard. Their financial results are published after subsidies are reflected, making them look profitable when, in reality, they are not. This is one of the things that makes many people from the financial community believe that Green Energy is the solution for the future.

In this post, I will discuss these ideas further. A related issue is, “Which type of oil production fell most in the 2018-2021 period?” Many people had expected that perhaps high-cost energy production would fall. Strangely enough, the production that fell most was that of OPEC oil exporters. These oil exporters often have a very low cost of energy production. The production of US oil from shale also fell.

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Canada Spent $23 Billion to Support Pipelines in Just Three Years

Canada Spent $23 Billion to Support Pipelines in Just Three Years

Taxpayers should understand the financial and climate risks of the big commitment, says an independent report.

Canadian pipelines have received over $23 billion in support from federal and provincial governments over the past three years, according to a new report from the International Institute for Sustainable Development.

The independent think tank crunched the numbers in a report that looked at the scope of government support for oil and gas pipelines.

The report looks at a broader definition of government support than just subsidies. Government support includes “any way that the federal or provincial governments promote fossil fuel production in a way that has to do with public money,” Corkal says.

Subsidies, on the other hand, are legally defined by the World Trade Organization as a beneficial financial contribution from a government.

Author Vanessa Corkal, policy advisor for Canada Energy Transitions at the institute, says it’s impossible to calculate the exact amount of pipeline subsidies because of a lack of government transparency.

“We thought it was important to highlight the high level of support the Canadian and Albertan government put towards this area,” Corkal says.

It’s important Canadians understand the financial risk governments have made by investing in pipelines, which may never get finished or never pay off, Corkal says.

But the report was also released one week after British Columbia experienced a devastating heat wave, which is likely linked to climate change and therefore the fossil fuel industry, she says.

Canadians need to consider “whether or not these investments are putting us on the path to deal with climate change at the scale and the pace that we need. And the pace we need has really been made clear this past week,” she says.

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The G-7’s Reckless Commitment To Mounting Debt

The G-7’s Reckless Commitment To Mounting Debt

Historically, meetings of the largest economies in the world have been essential to reach essential agreements that would incentivise prosperity and growth. This was not the case this time. The G7 meeting agreements were light on detailed economic decisions, except on the most damaging of them all. A minimum global corporate tax. Why not an agreement on a maximum global public spending?

Imposing a minimum global corporate tax of 15% without addressing all other taxes that governments impose before a business reaches a net profit is dangerous. Why would there be a minimum global corporate tax when subsidies are different, some countries have different or no VAT rates (value added tax), and the endless list of indirect taxes is completely different?  The G7 “commit to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises”. This entire sentence makes no sense, opens the door to double taxation and penalizes the most competitive and profitable companies while it has no impact on the dinosaur loss-making or poor-margin conglomerates that most governments call “strategic sectors”.

The global minimum corporate tax is also a protectionist and extractive measure. The rich nations will see little negative impact from this, as they already have their governments surrounded by large multinationals that will not suffer a massive taxation blow because subsidies and tax incentives before net income are large and generous. According to PWC’s Paying Taxes 2020 (https://www.pwc.com/gx/en/paying-taxes/pdf/pwc-paying-taxes-2020.pdf), profit taxes in North America already stand at 18.5% but, more worryingly, total tax contributions including labour and other taxes reach 40% of revenues. In the EU & EFTA profit taxes may be somewhat smaller than in North America, but total taxation remains above 39% of revenues.

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Is the United States on The Same Calamitous Path as Yugoslavia?

Of all the inflationary disasters in modern economic history, Yugoslavia’s is the one most ignored by the mainstream. To be sure, the collapse of the Eastern European nation was a slow burn, but with a big explosion at the end. Most people are familiar with the Serbian/Croatian war and the genocide that followed, but few people are familiar with the economic crisis that led to the conflict.

I am not here to present an in-depth analysis of the eventual breakup of Yugoslavia, only to examine the conditions that triggered it. I believe there are some interesting similarities to burgeoning conditions within the U.S., along with some distinct differences.

The first stage: inflation

President Josip Broz Tito led the nation in various capacities from 1953 to 1980. He used two powerful tools to clamp down on unrest in the ethnically-diverse nation: large-scale repression of dissenting voices using both police and military forces, and allowing regional foreign borrowing. The latter might not sound particularly important. According to the CIA’s 1983 national intelligence document Yugoslavia: An Approaching Crisis?:

Although self-management in theory permits workers to own and manage their enterprises, in fact the leaders in the six republics and two provinces… became the dominant economic decision makers. They grew increasingly protectionist and isolated from each other in pursuing local interests. Ignoring national economies of scale and ultimate profitability, they built redundant enterprises, blocked competition on the “unified market,” and granted unrealistic price increases and subsidies to favored industries. Thus, by the early 1980s inflation in the 30- to 40-percent range became chronic…

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How the World’s Energy Problem Has Been Hidden

How the World’s Energy Problem Has Been Hidden

We live in a world where words are very carefully chosen. Companies hire public relations firms to give just the right “spin” to what they are saying. Politicians make statements which suggest that everything is going well. Newspapers would like their advertisers to be happy; they certainly won’t suggest that the automobile you purchase today may be of no use to you in five years.

I believe that what has happened in recent years is that the “truth” has become very dark. We live in a finite world; we are rapidly approaching limits of many kinds. For example, there is not enough fresh water for everyone, including agriculture and businesses. This inadequate water supply is now tipping over into inadequate food supply in quite a few places because irrigation requires fresh water. This problem is, in a sense, an energy problem, because adding more irrigation requires more energy supplies used for digging deeper wells or making desalination plants. We are reaching energy scarcity issues not too different from those of World War I, World War II and the Depression Era between the wars.

We now live in a strange world filled with half-truths, not too different from the world of the 1930s. US newspapers leave out the many stories that could be written about rising food insecurity around the world, and even in the US. We see more reports of conflicts among countries and increasing gaps between the rich and the poor, but no one explains that such changes are to be expected when energy consumption per capita starts falling too low.

The majority of people seem to believe that all of these problems can be fixed simply by increasingly taxing the rich and using the proceeds to help the poor…

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The Hunt for Global Taxes

The proposal is to create a global tax rate as world leaders move to create a one-world government. The United Nations, behind the curtain, is preaching that ONLY they can solve the world crisis in climate change, for it requires a single government to control the world. On top of that, Bill Gates has taken over the funding for studies by Ivermectin & Fluvoxamine Clinical Trial Targeting COVID-19. We can bet that given his monopoly over vaccines, taking over the funding of studies to show an alternative to vaccines will by no means be legitimate. The conflicts of interest are vast.

As I have warned, they desperately needed to remove Trump from office because they viewed him as an outsider and someone elected by “populism,” which threatened the world establishment of political control by elite career politicians. They are now moving in high gear to eliminate democracy by 2022, but certainly, their goal is by 2024.

As I have warned, our models of politics have NEVER shown Panic Cycles since the 1930s. It appears that some states are trying to fight back where the Democrats want mail-in ballots that are not secure and same-day registration to vote to ensure there can be no verification of who the people even are. The Supreme Court has abandoned its role to protect our constitution by refusing to hear any of the cases, which may not have overturned the election but would have dealt with changing the rules as they went.

People have no idea what is at stake. These people in power want ABSOLUTE control, and they never want another popular person to run for office anywhere that would dare to threaten their goal of eliminating democracy.

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Canada, the Supreme Court hold that Carbon Tax is Constitutional

In Canada, the Supreme Court ruled Thursday that Ottawa has the power to impose a carbon price across the country as a “matter of national concern.” This is a major win for Trudeau and he can really make sure that the Canadian economy further declines to enable the Build Back Better agenda.

Let me make this VERY CLEAR. Even the US Supreme Court upheld Obamacare by holding it was a “TAX” When Obama deny that. Even the US Supreme Court would have struck down Obamacare as a social program, but as a TAX it held that government can impose ANY tax it so desires and at any rate. When it comes to taxes, the Supreme Courts of Europe, USA, Canada, or Bangladesh, will ALWAYS rule in favor of governmental power to TAX without constraint. They will ignore the history that 99% of all revolutions unfold because of taxes. Therefore, do not be surprised about tax rulings by the courts. This is also when Western society is doomed. We will not be able to sustain this sort of government beyond 2032. So just start planning now for the next real Great Reset which will be the overthrow of republics.

This is why in my solution, TAXATION must be abolished – PERIOD! If we simply printed the amount of money we needed to run government and it is capped at say 5%-10% of GDP, it would be far less destructive than taxation for the debt will never be repaid. At times, the accumulative interest expenditures have reached 70% of the debt showing that the real problem is borrowing in the first place. All of this COVID and Climate Change is a cover-up for the fact that the system of debt is coming to an end…

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martin armstrong, armstrong economics, climate change, carbon tax, canada, taxes, supreme court of canada, canadian government

ONLY


Claude Monet Grand Canal, Venice 1908
Our freedoms are cancel-cultured one by one, and by now hardly anyone notices anymore, because the media is in on it. But this cannot end well. We better stop this now, or it will get awfully out of hand. It’s a sliding scale bouncing down a slippery slope that gifts politicians and “health authorities” the world over with ever more powers, which they really should not have, as everyone would agree with who takes a step back to look at the bigger picture.• ONLY doctors are experts.

• We use ONLY vaccines to fight Covid, no prophylactics. No vitamin D, HCQ or ivermectin.

• We have ONLY Emergency Use Authorization vaccines.

• We can soon ONLY travel after having been inoculated with such vaccines.

• We can ONLY express officially approved opinions.

• ONLY doctors are experts.

You can’t let your country be run by doctors, virologists and epidemiologists. Anyone can understand that. But this is the reality:

Advisory Committee On Pandemic Needs Variety Of Experts, Not Just Doctors

The existing committee of experts advising the government on the pandemic must reshape to add experts from different research disciplines instead of one to become more efficient, according to a professor on Friday. Manolis Dermitzakis, professor of genetics at the University of Geneva, told Skai television that, in the first wave of the pandemic, the decisions for the committee were simple. It ONLY had to decide whether some activities should open or close, while the public largely complied with the restrictive measures. But the complexity of the situation as the pandemic continued from the summer onwards was so great that a commission which includes ONLY doctors could not function. Dermitzakis also argued that the panel must have fewer members. “A committee that has 30-40 members and consists ONLY of doctors cannot function,” he said.

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The End of Paper Money – the Digital Revolution

The assumption in governments has always been that WE ARE THE PROBLEM – not them! They have really believed that if they could tax the underground economy they would have balanced budgets. We all know that in reality, no matter how much money they collect, they will always spend more. This idea that digital currency will wipe out crime is rather absurd. I was talking to a young person who buys their weed, like so many these days. They make a phone call, it is dropped off in their mailbox, and they pay by some cash transfer application. So they never even see the person anymore. So the move toward digital transactions has not eliminated the underground economy, it has actually improved it making it more efficient.

Meanwhile, the criminals have to learn now how to code in order to hack into systems. It seems that this trend is forcing criminals to become much more professional in their endeavors.

 

Japan Embraced Debt As a Way Out of Its Budget Crisis. It’s Not Working.

The sudden resignation of Japans Prime Minister Shinzo Abe has led to evaluations of his so-called Abenomics. Many have praised Abe’s aggressive monetary policy because the long shopping list of the Bank of Japan (government bonds, corporate bonds, ETFs and real estate investment trusts) has inflated stock and real estate prices (Shirai 2020Financial Times 2020). Concerns remain on the fiscal side since Abe’s consumption tax hikes from 5 percent to 8 percent in 2014 and to 10 percent in 2019 are widely seen as a failure (The Economist 2020). Indeed, Abe resolved Japan’s deep-seated fiscal problems only superficially.

Figure 1: Tax Revenues of Japan’s Central Government

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Source: Ministry of Finance, Japan.

The core of the problem is cheap money issued by the Bank of Japan, which had caused a stock and real estate bubble in the second half of the 1980s. While the bubble had inflated tax revenues, its bursting was followed by an unprecedented economic slump during which the corporate and income tax revenues collapsed from 43 trillion yen (approx. 390 billion dollars) in 1990 to 23 trillion yen (approx. 185 billion dollars) in 2012 (Figure 1), when Abe took office.

Figure 2: Social Security Expenditure and Local Allocation Tax as Share of Total Tax Revenues

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Source: Ministry of Finance, Japan. Central Government.

At the same time Japan’s aging population ballooned the government contributions to the public pension and health insurance system, from 12 trillion yen (approx. 110 billion dollars) in 1990 to 36 trillion yen (approx. 327 billion dollars) in 2019. In addition, the so-called local allocation tax grants of around 16 trillion yen per year (approx. 145 billion dollars) to the economically exhausted Japanese periphery continued to constitute a heavy burden for the central government. In the wake of the global financial crisis, both together had increased far beyond the central governments’ tax revenues (Figure 2).

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No Go Zones: A Guide to Western Failed States and European Secessionist Movements

No Go Zones: A Guide to Western Failed States and European Secessionist MovementsThe failed state is to post-modernity what the nation-state was to modernity. It’s a recent development that is a hallmark of our age – like a state, but incapable of exercising sovereignty over all of its nominal territory. And while it might sound a little far-fetched, the failed state isn’t just coming to the West. It might already be here.

What Is a Failed State?

A failed state is a state no longer exercising effective control over the whole of its nominal territory. This can take a number of forms in practice, such as:

  • de facto separatist nation or nations existing within the boundaries of their de jure territory, competing for the monopoly on legitimate use of physical force.
  • Failure of the legitimate authority of the nation to make practical, collective decisions.
  • Inability to adequately provide basic social services such as policing, firefighting or emergency medical services to some or all of its territory.
  • Inability to connect with other states through diplomatic channels; a lack of participation in the international community.
  • A central government incapable of collecting enough tax revenue to operate effectively.

One or several of these factors can be present in a failed state. Once a state is “failed,” this often means widespread crime, corruption and outsized influence by non-state actors.

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Panic in Real Estate

COMMENT: I live in central West Texas, I am passing on to you the fact that there is a “rush” of sales in rural property’s. Houses with small amounts of land attached are “flying off of the shelves” so to speak. This is occurring throughout all of West Texas and in the Panhandle. The effort to getting out of the cities. Even cities as small as 25,000 is in full swing! People are well aware of the potential of what is in the near future and are not sitting around wondering what they should do.

They are acting!

J

REPLY: There is a massive exodus from California and New York in particular. Even in North New Jersey, houses are selling in just days and over asking prices for cash. People are bailing out of New York City in herds. Here in Florida, condos are selling as fast as they can get them up in St Petersbourg. These lockdowns and COVID restrictions that are insane in the major cities have set in motion a massive exodus that these authoritarians never anticipated. As they flex their muscles to try to make this so draconian over nothing, they are complete the cycle which has been pointing to the collapse of urbanization, and the rich will flee.

One of my favorite stories of the Sovereign Debt Crisis is the City of Mainz, in Germany, around 1440. The goldsmith Johannes Gutenberg invented the printing press, which began the Printing Revolution that enabled the Renaissance to flourish with the printing press which could produce up to 3,600 pages per workday compared to the hand-copying by scribes which would produce only about 40 pages per day. The printing press then spread within several decades to over two hundred cities in a dozen European countries.

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The Great Reset – The Final Battle Against Marxists

The Great Reset – The Final Battle Against Marxists

The rising civil unrest is starting to take notice of Bill Gates and his consortium hell-bent on changing the world economy. They have used the coronavirus as a ploy to shut down the world economy all for their Climate Change Agenda. There is a mountain of circumstantial evidence that points to Fauci funding the creation of this virus and transferring it to the Wuhan lab where neither China nor the United States leaked it, but this consortium which has planned this Event 201 on how to destroy the world economy and rebuild it from scratch. They are already introducing Guaranteed Basic Income, assuming they can wipe out over 300 million jobs and then pay people to sit home and watch TV, where they recreate the world in their own image which they are promoting as the Great Reset.

This has all been planned and it is being promoted by the infamous Davor — World Economic Forum. These people are all elitists who would never walk among us who they consider the great unwashed. They have unleashed domestic violence on the world and encouraged all the suicides by imprisoning people, and stripping them of all human rights. Their view is that the world is overpopulated, so thinning the herd to save the planet is justified and not genocide. Countries like Thailand saw their tourist trade collapse and countless food lines, all for a fake virus. These people have used the press to terrorize the people to achieve their goal to recreate the world economy as “greener, smarter, and fairer.” The World Economic Forum is promoting a Marxist agenda with a 50-page manifesto organized by the communist Thomas Piketty. The Forum promotes a new Marxist world, calling upon Piketty’s “urgent new message on how to fight inequality” where they want to attack anyone with wealth. Their proposal for Europe is to increase taxation by 400%!

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Bankrupting America

Bankrupting America

Bankrupting America

Source: AP Photo/Alex Brandon

Two weeks ago, President Donald Trump signed the largest stimulus bill in U.S. history: more than $2 trillion.

For once, both Republicans and Democrats agreed. The Senate voted 96-0. The House didn’t even bother with a formal vote.

At the White House, a reporter asked the president, pointing out that the bill includes $25 million for the Kennedy Center, “Shouldn’t that money be going to masks?”

“The Kennedy Center has suffered greatly because nobody can go there,” Trump responded. “They do need some funding. And look — that was a Democrat request. That was not my request. But you got to give them something.”

“Something” they got. The bill includes $25 million for Congressional salaries, $50 million for an Institute of Museum and Library Services and lots of other wasteful things.

Only a few politicians were wary. Rep. Thomas Massie complained that he wasn’t even allowed to speak against the bill.

Rep. Alex Mooney asked: “How do you pay for it? Borrow it from China, borrow it from Russia? Are we going to print the money?”

Those are good questions.

Our national debt is already $24 trillion. Now it will jump, percentage-wise, to where Greece’s debt was shortly before unemployment there hit 27%.

Greece was bailed out by the European Union. But the United States can’t be bailed out by others.

How will we pay off our debt? That’s the topic of my new video.

There are really three options:

1. Raise taxes.

2. Print money.

3. Default.

Let’s consider each:

1. Raising taxes on rich people is popular. Even Michael Bloomberg wants “higher taxes on billionaires” like him.

But raising taxes on the rich often kills the wealth and jobs some rich people create. And it won’t solve our debt problem. Even if we took all the billionaires’ wealth — reducing their net worth to zero — it would cover only an eighth of our debt.

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What Will It Take to Get the Public to Embrace Sound Money?

What Will It Take to Get the Public to Embrace Sound Money? 

In the last decade, the combination of virulent asset price inflation and low reported consumer price inflation crippled sound money as a political force in the US and globally. In the new decade, a different balance between monetary inflation’s “terrible twins” — asset inflation and goods inflation — will create an opportunity for that force to regain strength. Crucial, however, will be how sound money advocacy evolves in the world of ideas and its success in forming an alliance with other causes that could win elections.

It is very likely that the deflationary nonmonetary influences of globalization and digitalization, which camouflaged the activity of the goods-inflation twin during the past decade, are already dissipating.

The pace of globalization may have already peaked, before the Xi-Trump tariff war. Inflation-fueled monetary malinvestment surely contributed to its prior speed. One channel here was the spread of highly speculative narratives about the wonders of global supply chains.

Digitalization’s potential to camouflage monetary inflation in goods and services markets, on the other hand, has come largely via its impact on the dynamics of wage determination. It has forged star firms with considerable monopoly power in each industrial sector. Obstacles preventing their technological and organizational know-how from seeping out to competitors means that wages are not bid higher across labor markets in similar fashion to earlier industrial revolutions. These obstacles reflect the fact that much investment is now in the form of firm-specific intangibles. Even so, such obstacles tend to lose their effectiveness over time.

As deflation fades, monetary repression taxes (collected for governments through central banks’ manipulation of rates to low levels so as to achieve 2 percent inflation despite disinflation as described) will undergo metamorphosis into open inflation taxes as the rate of consumer price inflation accelerates. Governments cannot forego revenue given their ailing finances. Simultaneously, asset inflation will proceed down a new stretch of highway where many crashes occur.

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Olduvai IV: Courage
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Olduvai II: Exodus
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