What's Yours Is Now Mine: America's Era of Accelerating Expropriation
April 26, 2021
The takeaway here is obvious: earn as little money as possible and invest your surplus labor
in assets that can't be expropriated.
Expropriation: dispossessing the populace of property and property rights, via the legal and financial over-reach of monetary and political authorities.
All expropriations are pernicious, but the most destructive is the expropriation of labor's value while the excessive gains of unproductive speculation accrue to the elite that owns most of the nation's wealth.
In a nation in which the leadership has finely honed the art and artifice of legalized looting and financial legerdemain, it's not surprising that the expropriation of labor's value takes many forms. For the self-employed and small business proprietor, the list is practically endless:
1. Proliferating junk fees for permits, licence renewals, applications, late fees, penalties, fines for violating obscure regulations, etc. (Never mind if you're losing money; by definition, as a business owner you're "rich" and deserve petty expropriations. If you're Amazon, however, we'll shower you with subsidies and tax breaks.)
2. Sky-high liability insurance, disability insurance and workers compensation insurance, because all the fraud and friction in these systems adds expense and you're the one who will pay for it all.
3. Sky-high rent. Now that the Federal Reserve jacked up the "market value" of a $1 million commercial building to $10 million via asset inflation, rents have soared even though no improvements have been made to the tenants' spaces. Thanks to the Fed, rents are many multiples of what they would be if the Fed hadn't jacked up real estate to absurd overvaluations.
4. Taxes on wages. Consider the Self-Employed in a High-Tax State: let's start with the 15.3% federal self-employment tax on wages up to $142,000, then add federal tax rates that quickly reach 32% and up and state taxes that hit 10% and higher in high-tax states, and then don't forget the extra 3.9% Medicare tax above $125,000, and when we add all this up, the total tax rate exceeds 61%. (You want to quibble? OK, make it 55%. How much difference does this make? None.)
Now this may be acceptable in Scandinavian nations where you receive virtually free healthcare and higher education, but here in the Accelerating Expropriation USA, the Self-Employed in a High-Tax State has to pay insanely costly healthcare insurance out of the 39% that's been oh-so-generously left to live on, as well as the insanely high student loans that were taken out to attend university.
Factor those in and the Self-Employed in a High-Tax State gets a third or less of her labor's value. This only rises slightly in so-called lower-tax states, which tend to compensate for lower income taxes with high sales taxes and property taxes ("they get you coming and going.")
Inflation is stealth expropriation, and like all expropriation, we're told it's for our own good, just like any other beating delivered by authorities. So as the Fed pushes asset inflation to Mars and whines that real-inflation isn't high enough yet, the Self-Employed in a High-Tax State are experiencing a monthly expropriation of the purchasing power of what little labor value has been left to them.
I received an insightful email on this topic from A.C.:
Once you've had it done to you personally (as I did through my business) you view the world in a whole new light.
Without assets in which you can store the excess value of your labor minus the worry of debasement or theft, the incentive to create that excess goes away. That's why the BLS 'take this job and shove it' JOLT measure is staying so stubbornly high.
Unfortunately, it's that excess labor that funds what we call civilization.
People without the margins which excess labor can create tend to revert, for their own security, to community groupings based on familial bonds. They're a store of value that's stable and can't be inflated away.
Those without such bonds are SOL. Hunger goes a long way in mitigating the personality disorders which impair the creation of such bonds."
Here's the takeaway: Any "wealth" denominated in financial instruments will be expropriated by one means or another, so "wealth" has to be denominated in some other "currency", social, cultural, skills / intellectual, that is beyond the grasp of monetary and political authorities. This is the primary reason why crazy risky speculation is being pursued with such intensity: there is no way to escape the grinding impoverishment of expropriation for most wage-earners except to make more "wealth" via crazy-risky gambles than is being expropriated.
The Only Way to Get Ahead Now Is Crazy-Risky Speculation.
There's another dynamic few grasp: When the Empire runs out of colonies to exploit, it brings its expropriation machinery home to stripmine the domestic populace. I explained this dynamic back in 2012:
Neofeudalism and the Neocolonial-Financialization Model (4/24/12)
Welcome to Neocolonialism, Exploited Peasants! (10/21/16) October 21, 2016
Why are we not surprised that as expropriation accelerates on all fronts, the Middle Class Now Holds Less Wealth than Top 1 Percent? (brookings.edu) Thanks to the magic of pay-to-play "democracy," the super-wealthy and corporate elites escape all the expropriation machinery stripmining wage earners. The corporate taxes collected are a tiny slice of the hundreds of billions corporations spend on stock buybacks, the only purpose of which is to enrich insiders and the super-wealthy who own most of the nation's financial assets.
The takeaway here is obvious: earn as little money as possible and invest your surplus labor in assets that can't be expropriated. Develop low-overhead gigs and enterprises that are 100% yours so you can legitimately write off expenses and control how much work you decide to take on. Keep accurate records and pay whatever taxes are due, but by minimizing net income then taxes will be modest. Invest your best self, time and energy in assets that can't be assessed, taxed or expropriated: your skills, networks, value you create and invest in your own self-sufficiency, sharing and good living of the kind that can't be bought or sold or expropriated.
I cover these topics in greater depth in my books:
Get a Job, Build a Real Career, Defy a Bewildering Economy
An Unconventional Guide to Investing in Troubled Times
Money and Work Unchained
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