Tuesday, January 16, 2018

Peak liberalism means wealth now begins to transfer back to conservatives.

All things go in cycles with an ebb and flow which is difficult to predict at the micro level but which is nonetheless inevitable at the macro level.  When liberalism was on the rise, all things liberal got more powerful and that includes the wealth of liberals.  These things do not get to be the way they are overnight; they happen in steps and by degrees.  It is a stair step progression toward the peak.  And while most people cannot perceive it, we are at an historical peak for liberalism.  The signs are all around us including massive wealth by corrupt liberal "public servants" like Bill and Hillary Clinton as well as many corrupt RINOs (i.e. fake conservatives) on the GOP side.  How can someone who has never held any real job except that of government administrator be worth 100 million dollars?  It's a question that will soon be asked of Bill and Hillary IMO.

Government exists to pick winners and losers and liberals have been a big winner in the wealth race for the past 50+ years.  But with the peaking of liberalism and the onset of conservatism we have to start seeing a significant reversal in this trend in order to validate the overarching thesis of peak liberalism.  In other words, government must begin tipping the wealth scale back toward center and eventually, in 50 years, hard right.  Because of this I am constantly on the look out for such signs and with the Trump tax changes we see a significant shift worth reporting.

It has been the game of liberal states to charge a very high state income tax on their residents.  In California the "top marginal income tax rate of 13.3% is the highest state income tax rate in the country".  With all this tax revenue at its disposal, the California government has the ability to make corrupt friends and influence people in support of its liberal agenda.  While it might just seem like Cally is ripping off its own residents with a very high tax rate on top of federal taxes, the truth is not so simple (which is true of all elitist scams).  Because of the ability to write off state income taxes against their federal tax bill, a big portion of California state tax has actually been getting paid for by the federal government.  Or to be more precise, by adding to the federal debt.

This sneaky crap is how California has been able to keep a steady and large flow of cash going into its unproductive if not counterproductive liberal agenda for many years.   But a major new provision of the Trump tax changes is to limit the amount of state tax that can be written off the federal tax bill.  By setting a limit of $10k on state and local tax deductions for federal income taxes, Trump is attacking the top earners in California (and there are a lot of them due to large financial centers like San Francisco and Los Angeles as well as highly paid execs in Silicon Valley and Hollywood). 

In California, you have to be single and make $140k in order for your tax bill to hit 10k:

This means that is is primarily rich people in Cally who are going to feel the brunt of being unable to write off their state taxes on their federal return. While most people will say "OK big deal, who cares if they tax the rich" the truth is that if the rich get tired of being taxed, they are the people who can make big decisions for entire corporations.  We have been seeing this in Illin' Noise for several years now.  Once a company moves out you can bet it is never coming back.  So I expect this Trump move to punch Silicon Valley in the stomach.  Lots of highly paid people live there and now they all got a huge cut in their take home pay by being limited in their write off of state taxes.

First the rich will leave and close on their heels their companies will leave and then the best and brightest employees will bail out.  Soon after, all that's left are those who thought they could get by sucking at the government's teat only to find that government never had any milk.  Any milk found in government's teat was simply stolen from the productive citizens.  But once the productive people leave, Peter has left the building and so there is nobody left to rob in order to give to Paul.  At that point, the poor people and the government they love so much wither and die.

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