Elizabeth Warren wants a 2% wealth tax each year on every asset a rich person owns. The asset level for this tax starts out high, but once a new tax is introduced, it soon grows in scope. The federal income tax started out at 1% in 1913. Before long the annual wealth tax would likely be 5% and apply to all high earners.
That’s not the worst part. Since most people would fail to report all their assets on their tax filings, the IRS would probably require that affluent taxpayers file a financial statement along with their tax returns. Any omission on the statement would be a felony. If the IRS spotted anything amiss, they would be able to get a court order to go into your home and audit your assets. Fines and even jail would accrue to evaders of this insidious tax. The fact that plenty of people on the left think this is a great idea shows how little they understand freedom.
Ron Wyden, another liberal senator, wants to radically alter the capital gains tax. For example, if you buy a stock and one year later have a gain, you must pay a tax on the gain even though you haven’t sold the stock. Many investors would have to sell the stock in order to pay the tax. Talk about upsetting the financial applecart and creating chaos in the markets.
The dozen countries that have tried a wealth tax soon gave it up. Their citizens moved massive amounts of capital out of their countries and that began to harm their economies. Rich people aren’t stupid, they will bristle at this unfair tax and do what they can to thwart it. A wealth tax in America would prove to be highly counterproductive.
HOW TO FAIL IN BUSINESS
The failure rate in the coin and bullion business is higher than almost any other business. I have a list of our competitors in 1982 and all of them are out of business. I can count over 50 dealers in Minnesota that have gone under. Most of the companies that have advertised on TV or with print ads have disappeared. Why is it that coin dealers go bankrupt so often? It’s because they all try to be the cheapest source. When I see a dealer advertise that they have the lowest price, I question their intelligence. In effect, they are losing money on these transactions.
After investigating a number of coin dealers in California, the Santa Barbara City Attorney concluded that their business plan ensured their failure. When dealers fail, they often can’t deliver the gold and silver that they sold. Their clients lose their money. Over the years, these unfortunate customers have lost millions. When you hear a company advertise that they can beat any price, or they have the lowest price on the internet, or any similar claim, you should proceed with great caution.
Not many people in the world know the incredible facts about silver. If they did, they would buy it and the price would go out of sight. The combination of industrial demand and investment demand requires around one billion ounces of silver each year. That’s the total amount produced each year from mining and recycling. Only 100 million ounces is available for investment, so a slight uptick of investor buying would overwhelm the market and cause a shortage.
We have just experienced one-hundred million ounces of buying of physical silver over the last month or so. That means we are perilously close to a shortage. The price rise in silver has caused more buying. A continuation of the price rise will cause even more buying. In the past we have experienced shortages in silver coins and bars. That causes investors to aggressively buy whatever silver item they can get. If the price continues to rise, we are likely to soon experience a buying frenzy in physical silver. Silver analyst Ted Butler has said that it’s quite possible the price will have to burn itself out at levels so high that owning a small amount of silver will make a significant difference in one’s financial fortunes.