Politicians never seem to have much trouble telling us they want to raise taxes. It seems to come as naturally to them as breathing does to the rest of us. They do their level best to keep the spotlight on “the rich,” of course, who they say must “pay their fair share.” But what do politicians hardly ever say? They hardly ever say who “the rich” are. And when they do, they usually point to multibillionaires while meaning people with considerably less. What do they also never say? They never say what a “fair share” is. It really just means “more.” Who would’ve thought.

This leaves a problem for the class warfare class, because it is these same rich people who fund their political campaigns. And as if that weren’t bad enough, most Congressmen and Senators are rich themselves. The two who yell the loudest about taxing the rich, Bernie Sanders and Elizabeth Warren, are worth $2.5 million and $12 million respectively. What are the odds that these two, and all their cronies in Congress, would bite the hands that feed them? What are the odds they would bite their own hands?

We do well to remember 1988. George H. W. Bush, in accepting the Republican nomination for the presidency made his point perfectly clear. People would pressure him to raise taxes, but when that happened he would say, he claimed, “Read my lips. No new taxes.” All things considered, that’s a pretty easy promise to make, but a much harder promise to keep. It wasn’t long before Bush broke his promise, but in doing so he only went after “the rich,” signing into law a 10 percent luxury tax on things rich people buy – yachts, private planes, and expensive jewelry.

The tax was supposed to raise more than $30 million in additional revenue, but it didn’t raise much of anything. The rich simply went elsewhere to purchase their luxuries. Entrepreneurs and the working class paid, and they paid dearly as the tax destroyed almost 10,000 jobs in the boating, aircraft, and jewelry industries. Meanwhile, foreign companies in these industries made out like bandits. And that’s the difference between the rhetoric and the reality of taxation.

We can dig deeper still into tax reality through the Congressional Budget Office (CBO), which asks Americans how much they earn and how much they pay in federal taxes. Breaking down those answers by income level provides some valuable insight into who is and isn’t paying their “fair share.”

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Our friends over at Integrated Wealth Management thought our readers would enjoy this article. ~Ed “Going forward, active management of portfolios versus passive index investing in ETF’s will be more important than ever because market weighted indexes are too overweight in tech, those tech stocks are at high historical valuations and a rising interest rate environment will impact these stocks. So good stock selection will pay off for investors.” ~Andrew Ruhland, Integrated Wealth Management.

It’s no secret that money has poured into passive equity vehicles as investors seek low fees above all else. To date, that has worked out just fine since equity indexes have compounded their returns at acceptable, if not above average, rates of returns. But, the world is different now than it was 10 years ago, and the low-cost advantage of passive investing may now be outweighed by its risks.

In this quick post we’ll address three risks to passive investing that together suggest the riskiness of this strategy may well be the highest it has ever been. Click here to read more.

Andrew Ruhland shares with Mike his strategy Core and Explore strategy – and how it offers a safe, structured and sophisticated way to take advantage of the Commodity Super Cycle.

I think that the collapse over the past week of Greensill Capital has a lot of systemic risk embedded within it, particularly as the fraudulent deals between Greensill and its major sponsors – Softbank and Credit Suisse – come to light. And that’s not even considering Greensill’s second tier of sponsors – entities like General Atlantic and the UK government – all of whom are up to their eyeballs in really dicey arrangements.

“You thought you were in an arm’s length arrangement where all your fellow investors had a pure financial interest,” he said. “Imagine you then found that, in fact, some of your co-investors were funding themselves.”

This is the first Big Fraud I’ve seen in 13 years with the sheer heft and star power to ripple through markets in a systemic way. Not since Madoff.   

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