07/03/2017

How taxes corrode economies and become a fraudulent pyramid scheme

 

The Vortex effect of NZ Taxation and the Global Economy
 

A prospective perspective theory on taxation
 

Lets look at a real basic tax rate of 10% for 10 Brothers where one Brother starts of with one dollar and trades with each successive Brother

Brother 1 has one dollar but pays 10% tax of 10 cents, so with 90 cents trades with brother 2

Brother 2  gets 90 cents but pays 10% tax of  9 cents, so with 81 cents trades with brother 3

Brother 3  gets 81 cents but pays 10% tax of 8.1 cents, so with 72.9 cents trades with brother 4

Brother 4  gets 72.9 cents but pays 10% tax of 7.29 cents, so with 65.61 cents trades with brother 5

Brother 5  gets 65.61 cents but pays 10% tax of 6.56 cents, so with 59.05 cents trades with brother 6

Brother 6  gets 59.05 cents but pays 10% tax of 5.9 cents, so with 53.15 cents trades with brother 7

Brother 7  gets 53.15 cents but pays 10% tax of 5.31 cents, so with 47.84 cents trades with brother 8

Brother 8  gets 47.84 cents but pays 10% tax of 4.78 cents, so with 43 cents trades with brother 9

Brother 9  gets 43 cents but pays 10% tax of 4.3 cents, so with 38.76 cents trades with brother 10

Brother 10  gets 38.7 cents but pays 10% tax of 3.87 cents, so with 35 cents in his hand, he looks at brother 1 with 90 cents worth of goodies compared to his miserable 35 cents worth and says WTF?

After 10 transactions that $1.00 is only worth 34 cents to the last brother! Under the guise of 10% the government has successfully robbed 64% or 64 cents of tax from that dollar in just  a few minutes of trading. Of course the trading and tax goes on to infinity, all being divisions of 10%, but as it does, the government gets more and you get less. In fact the whole lot is going down the tax gurgler, slowly at first, but faster as it approaches the rapid vortex of infinity. 

However, the government in its wisdom, figured things weren't happening fast enough, using this basic tax rate of 10%, and raised taxes including the higher incomes, using the guise of  'fairness' to the low income brothers.

But, incredibly, this is still not enough, so they bring in GST and whack it to 12.5%.(NZ) In their ignorance, this adds volume to our vortex  and causes our vortex of destruction, to spin faster....All it takes now is for Stephen Hawking to declare discoveries of .... taxation black holes .....riddled in the fiscal Universe!!
 

So now lets look at out 10 Brothers with GST.. imagine if, as you will,  each Brother is a business the buys a product that is not a business product i.e what you'd call the 'cost of living'. GST specifically targets the cost of living... nothing else. e.g food . This comes with the price of a personal tax at 10% and GST at 12.5 %. For our example we'll use the total of  22.5%. The purist might rightly say 10% tax on a dollar leaves 90cents to be taxed with 12.5% GST which totals 21.5 cents tax and GST thus 21.5% not 22.5% as total tax.. However we'll assume our Brothers aren't on PAYE (pre-tax) system and start with a dollar coin in their sweaty palms and find themselves owing the personal tax... as you do....

Brother 1 has his dollar, buys bananas for himself  off Brother 2 whose business sells bananas but in doing so must pay 10% tax and 12.5% GST of 22.5  cents which leaves 77.5 cents to the actual value of the bananas he buys ( the remaining 22.5 cents lost to taxes)

After Brother 1 paid tax and GST,  Brother 2 gets the value of that dollar which is now 77.5 cents. Brother 2 wants apples and must pay 10% tax and 12.5% GST of 17.44  cents which leaves  him the value of 60 cents worth of  apples he buys for himself, off Brother 3.

After Brother 2 paid tax and GST,  Brother 3 gets the value of that dollar which is now 60 cents. Brother 3 wants lemons and must pay 10% tax and 12.5% GST of 13.5  cents which leaves  him the value of 46.5 cents worth of  lemons he buys for himself, off Brother 4.

Okay by now, we got the idea, well skip to 22.5% tax on every transaction , with Brother 4 having 46.5 cents which he spends with Brother 5.

Brother 5 has 46.5 cents which he pays 22.5% tax of 10.46 cents leaving him to 36 cents to spend with Brother 6

Brother 6 has 36 cents which he pays 22.5% tax of 8.1 cents leaving him to 27.9 cents to spend with Brother 7

Brother 7 has 27.9 cents which he pays 22.5% tax of 6.3 cents leaving him to 21.64 cents to spend with Brother 8

Brother 8 has 21.64 cents which he pays 22.5% tax of 4.9 cents leaving him to 16.77 cents to spend with Brother 9

Brother 9 has 16.77 cents which he pays 22.5% tax of 3.8 cents leaving him to 13 cents to spend with Brother 10

Brother 10 has 13 cents which he pays 22.5% tax of 3 cents leaving him to 10 cents to spend on the value of a product. He looks at Brother 1 and declares this country has inflation rate of  90% which occurred during the 10 minutes of trading between our family!! ... due to government economic policy!!

The figures of 22.5% tax and GST are conservative. . If you threw in things like petrol, cigarettes and alcohol your whacking up to and over a 50% slice every time! We haven't even factored in licenses, fees, duties, levies, registrations, rates, carbon tax and other government charges not covered by our tax example either

Arguably, you may say after Brother 10 tries to feed himself on 10 cents worth of bananas, he gets the dollar next time... True... but he has to work three times as hard to make it pay! If you work out the averages of all Brothers from this example, all they get is about 30 cents value from every dollar! They'll get a great deal less if they traded that dollar ...50 times..

  Again you could argue, the government puts 90 cents that it creamed off the 10 Brothers, back into the economy.... But its not quite like that.. they take this off, for the golden handshake, ..that off, for fringes and benefits, ...this we can waste with, another commission, enquiry or review, ...and oh.. we must show transparency, by passing that legislation, to protect ourselves and our investments, and ..yes ..we'll palm the hands of the World bank, that supports us, ....actually, we need to borrow a top up...  and ...yes we'll show accountability, by hiding this here, and that there, ....then we'll run an ad on TV. We can use Brother 1 and show how well we utilize the 10% tax, for the benefit of the public... never mind about the reality of Brother 10, trying to live on 10 cents ....well then .....maybe we put a little here, for essential services, that somehow is less, than what it cost to run the ad, saying how great we are.......and er... We now have 50 cents, to flick back into circulation with the unsuspecting public. Yes, ..so  this 50 cents goes through the 10 transaction cycle, and then gets re-entered into circulation as something like 25 cents! Ever diminishing in value! .....Always diminishing in value.....

While talking in diminishing values, think of it this way... not long ago .. a man being a one income earner, could support his family.... then with the timely introduction of womens rights, to boost a failing one man economy,.... it soon became the norm for a two income family, to survive the cost of living.... now we are looking at two, three families sharing one roof, just to live... complete with a cashless generation of ....swipe the iPhone ...for a Mars bar ...on credit!!

We look at these Brothers purchases as 'living expenses' as to what it costs each and every one of us to stay alive... i.e the cost of living. Profits from corporations are a different thing, they get channeled into investments etc which we don't see. The only thing relevant to this, is the wages that go to you, whether  you work for a corporation, or whatever. And as you know wages are directly related to the 'cost of living'.

But we're not quite finished yet.... if we think of every alternate brother as a corporation, and our family becomes, the town, the city, the country. The next time your at the checkout at the grocery store and see five people lined up ahead of you... they are, as five brothers paying that diminishing dollar, to five brothers rolled up as a corporation, that happens to be a grocery store. Not only is that recycling diminishing value trading happening at a rapid rate, right in front of you, but in every store, everywhere, all over the country !

You may also argue, that this whole hypothesis is based on wages.  People being taxed  and the cost of living, is entirely based on wages. It doesn't account for say, the assets of a business or corporation and it the value of those assets that add wealth to an economy.

However, it's not quite true, ... if the business owns a vehicle, the value of that vehicle is from the wages of the people that built it, the wages of the people that made the steel, rubber, plastic that went into it, the wages of the miner that mined the iron, the wages of the shipping company that shipped the materials, Yes.... the entire economy is built and based on wages.. From the time the first spade that hit the ground, whether a building or goods or services. But yes, this is the economy we're talking about, the circulation of finances that makes the economy, and the taxes being used to destroy it.

You may raise the point, .."Well.. what about the Treasury or Reserve Bank, it holds the wealth or resources of the country?". You are right, but as we have mentioned on the  previous page, this wealth and resource is made up of our security bonds based on our future wages, that we turn into assets!

You're probably going to ask..  "then, what happens to the big corporations who are supposed to pay their share?.."  Well they don't..  simply because they have the power and resources to evade tax, payoff politics to give them tax breaks, tax incentives... they invest elsewhere, offshore, they use their power and influence for every trick in the book, that we as the little people don't have. So at the end of the day... its folks like us supporting this whole corrupt pyramid system of finance!! Taxation is another pyramid scheme, the government, big corporations, high flyers at the top, going down through medium to small business and finally the majority of us little people at the bottom that are supporting the whole corrupt structure.
 

As a result, mothers .... are now feeding  their kids coca-cola and biscuits,  being the cheapest food source. This  creates children requiring state care, domestic violence, inadequate and expensive housing,  the need of and the lack of health, education and other essential services... the problems we all face.. that recur.. over and worse.
 

Yes ... we mentioned earlier about the government reintroducing our devalued dollar, now worth 50 cents back into circulation,  by ' borrowing a top up' off the World Bank (IMF), which it does. Of  course this 'top up' and interest accrued, is occurring every second. Take a look at the dial spinning on the NZ debt counter http://www.nationaldebtclocks.org/debtclock/newzealand Yup... this is the result of just the 'top up' taxation.... going down the gurgler...  spinning the debt of $1,000.00 every 6 seconds, 24 hrs a day 7 days a week! .. sucked off by the govt ... owed to the IMF/World Bank!

Government  vision only sees the virtues of Brother 1 paying 10% tax... it doesn't see the tail effect it has on the  rest of us, spiraling out of control...from the destruction it has created. Taxes have become  a parasitic enigma,  a fiscal nightmare ... an infinitive vortex that sucks the life out of the living ...  We're better off being economized by a 5 year old !


So to put the perspective into perspective... kinda thing ...we'll look at :

For every dollar, from every wage being transacted, loses it's buying power from taxation. So  the buying  value of that dollar is constantly being depleted. This attributes to the real cause of  inflation, .  Economists 'who wake up every morning to debate'  have no explanation to the cause of inflation other than the two examples here: http://www.investopedia.com/university/inflation/inflation1.asp 

1) Where demand is greater than supply, causes inflation as the price rises.

2) Companies putting up the price of goods due to costs.

These reasons are somewhat superficial. Their understanding of inflation doesn't factor in the underlying, undermining, reverberative,  ongoing, recursive, shadow effects of   taxation. Economists aren't physicists, they don't think of the vortex effect of circulate taxation.  

Consider the economies of Greece, France, Europe, these are old fiscal systems, taxation over time undermined those economies. They blamed  the GFC,  they blamed it on government corruption, whatever it was,  it didn't take much to topple it. They tried the EU,  but the economies were undermined to begin with, so naturally it failed.

The aged economy of the UK is propped by the IMF. US, Australia, Canada, NZ are newer economies, considered more stable, but still being undermined, and made much more progressive by modernisation, multiplied transactions, taxation (GST) on credit cards (yes.. this is tax on  money that hasn't even been created yet!)  and ignorance. This is more pronounced in New Zealand because of its smaller size.

 We're told government's try to keep inflation at 2-3%, but what they don't tell us is this is being 'topped up' with the IMF debts shown by the speeds of the national debt clock. It doesn't matter whether a government is good or bad, the vortex effect still remains... corrupt governments just make it worse. 
 

Nobody likes paying tax.... because maybe there is a valid reason for it....!

 

 

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