Remember when paying ones taxes was seen as a civic duty by society? It was looked upon as the necessary evil in order to maintain the American way of life. At least that’s what I was taught to believe. I was brainwashed into thinking that the role of government was to do the people wanted.
After all isn’t that what our bi-cameral, tri-level, checks and balances structure of governance is all about? What makes me think that it might all ba an illusion is the continued rhetoric by my fellow Chicagoan in The Oval Office who insists that tax cuts and spending are one in the same. It’s not the people telling government what WE want. No, it’s government telling us what we need. I can almost hear the close advisors using a famous Alexander Hamilton quote…”Don’t worry Mr. President, the masses are Asses.”
Let’s get a couple things straight. There are no more ‘Bush tax cuts’; it is now the tax code…period! So when we talk about rolling back tax cuts, it is a politically palatable way of saying that the government wants to put their proverbial hand deeper in our pockets.
Anyone who is convinced that this president does not engage in class warfare should pay close attention to the words he used in his speech in Boca on Tuesday. When the president refers to keeping taxes at their present rate as spending, then it becomes clear that there is a fundamental difference of opinion on what the role of government should be.
The reason the Obama administration and those around him are screaming for higher taxes is because of one fundamental reason: a lack of pro-growth policies. I created a word, Taxulationism, to help describe the situation in which we find ourselves. It’s a combination of Over Taxes, Over Regulation and Over Protectionism, all of which are killers of success and economic growth.
Looking back on the last three years, it is painfully obvious that the ambiguity around real tax reform - a continued attack on America’s entrepreneurs and serious over regulation - has led to what the president referred to as “the slowest growth rate in the last 50 years”…I’m confused, is he really surprised? He is attacking the top earners in the country, calling them out and accusing them of not paying their fair share. The glare of class warfare ideology is almost blinding in his proposal of the Buffet rule which is aimed at those making $1m per year or more.
T. Boone Pickens has paid over $665 Million dollars in taxes since he was 70 years old, yet apparently he hasn’t paid enough. Aside from the astronomical amount of money he has contributed to the treasury, think of all the jobs he created through his investments and the taxes generated through salaries and profits he created for others.
Think of the municipalities and states that were the direct beneficiaries of all of Mr. Pickens’ entrepreneurial spirit. No matter how you cut it, this class warfare is an attack on the very heart and soul of what makes America’s economy tick - investment capital.
How do we invest in this different environment? Buy stocks, buy commodities and stay out of Treasuries…and keep the faith. The Fed is left with no choice but to continue to debase the greenback so we must stay exposed to the market in the correct way. Remember, in a world filled with Fiat currencies and continued debasement, real assets become king. Ignore the noise and use the stock market selloffs as an opportunity to either initiate or add to positions.