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Posts Tagged ‘IRS’

It began during the reign of Ronald Reagan, although he certainly was not the architect of the idea.  Even so, he must have wholeheartedly approved. Why? Because it was good for business.  If there was ever a gigantic hoax put upon the unsuspecting American public, it is embodied in section 401k of the U.S. tax code.  It is this provision that provides for employers to set up tax deferred 401k retirement accounts for their employees. You know, so that when that day comes, in the dim and distant future, you will have a great big nest egg awaiting you, so you can have a long and comfortable retirement.  – Oh, and by the way, since all you workers now have these great 401k plans there isn’t a need any longer for your employer to provide a pension plan, is there?  So – goodbye pension plans. American workers, you are on your own.  How very Republican.

Oh, but wait.  There is one other little detail. You know all that money you can put in your 401k account? Well, you can’t put it in a bank and earn interest like other money you save. Of course you could of course put it in a money market account  with your broker.  There you could earn 0.003 percent interest and then watch the actual purchasing power of your savings drop by 50% or more in the next 30 years before you retire. (because of inflation. Or… you could invest it!  Yes, that’s the ticket!  You can put all of your money in the stock market – you could even buy stock in the company you work for!  And don’t worry. This isn’t gambling with your retirement money – it’s investing for the future!

Well, the future is here. As far too many boomers have found out and far to0 many children of the boomers have learned, there is no gold at the end of this rainbow, just a pile of horse manure – all of it a  gift from your government and big business and the IRS. Wasn’t it wonderful for them? Think of it. For so many years before the invention of the 401k scheme the Dow Jones average was essentially flat. The stock market was a no growth system.  Stocks had hardly moved since the Great Depression. Then, as if by magic, as soon as the 401k ripoff began the stock market started going up.  And the more our 401k dollars went into the market the more it went up!  Isn’t that incredible – just like the housing market! Of course the housing market went the way of all good Ponzi schemes…. and so did the stock market, because that was just an artificial bubble too – a scheme contrived by the arch Capitalists of America to use their employees wages to fuel the growth of their businesses, and all the while calling their scheme a retirement plan.

I’m afraid the chickens have come home to roost. Too many 401k plans are nothing but a smoldering ruin now. Too many retirees will be getting most of their retirement income from Social Security, not their 401k plan.  Thank God for Franklin Roosevelt, perhaps the last honest President this country has had.  But wait. It’s not over yet.  The 401k system still hangs over the heads of our youth. Cunning businessmen and government “servants” tell us to invest our 401k money wisely. Better still, young man, take the money and run.  Don’t listen to the advice of the big businessmen and certainly don’t listen to the government people who are owned by the businessmen.  They have worked out a system where your employer no longer has to give you a pension.  Even worse, a lot of people in power would like to kill Social Security as well.  Avoid the advice of businessmen and government hacks, they mean you no good.  We are truly floundering in a Republican world now – you are on your own and you will sink or swim by your own wits and not with any help from your employer or the government.

Meanwhile, a new crop of people are reaching retirement age every day. They are being pushed out from their jobs by mandatory retirement rules.  They can’t survive on what is left of their puny 401k and their Social Security benefits don’t come close to paying the bills. And WalMart doesn’t need anymore help. They’ll need to sell their homes now, but to whom? There is no market for houses anymore. It is like the retirees are stepping off the deck of the sinking Titanic only to find that there are no lifeboats in the water.  It is a slow moving catastrophe.  It is happening one day at a time, but it never makes the headlines.

How can a government tell its citizens to gamble in the stock market with their pension funds?  How can an employer look an employee in the face and shut down their pension plan while at the same time telling them to invest their savings in the company’s stock?  Today as people retire in their 60’s they can look forward to living a long life, perhaps into their 90’s or more.  But how will they pay for their housing and how will they buy food? The 401k catastrophe is only beginning. Wait a few years.  Wait until the retirees have spent what little is left of their 401k money.  Wait until they try to survive on their paltry Social Security payments. And just to rub salt into the wounds of these unsuspecting workers, wait until they try to take their money out of their 401k plan and they find they have to pay tax on each withdrawal – It was tax deferred, remember? Ah, but the IRS is sneakier than either you or I could ever imagine, for you not only have to pay tax on the money withdraw from your 401k, for if you also take additional money from your 401k to pay the 401k tax, you have to pay tax on that money too! So then, if you take out more money to pay that tax, well…you have to pay tax on that too! So you are paying tax on the tax on the tax. Isn’t that wonderful?  It’s a tax collectors dream.  And it all comes out of your 401k.  How perfect!

Happy retirement, America.

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It was a suicide.  The private plane was deliberately flown into the Internal Revenue Service building in Austin.  The pilot left a suicide note on the Internet – a note that the FBI is now desperately trying to remove. Why is the FBI removing the pilot’s last words from the Internet? So you can’t read them, of course.  It is a little too late for that though. Rick Sanchez has already read some of the note live on CNN.  It’s a little hard now to suppress what the man thought.

I’ve written about this before – suicide attacks that is.  I wrote about it in my article on 9/11, that other suicide attack on a building.  Why do people commit suicide? There is really only one reason – they are desperate and they see no other solution to their problems.  The man who flew his plane into the IRS building was desperate, and he wrote a six page letter telling of his long struggles with financial problems, of how he wrote to his Senators and Congressmen but was always ignored.  He wrote about his difficulties with the IRS and his perception that he was being treated wrongly.  He wrote about American business and how they always get preferential treatment from the government while the people are left to suffer.  He wrote about the current economic meltdown and how the banks were thrown a massive economic lifeline – even though they were the proximate cause of the meltdown – while he, also a victim of the economy, received not a dime of help.

It was anger; no – rage. It was frustration.  It was despair. It was an act of revenge. It was a statement.

So, what are we to make of this? Is this a one time oddity? Does this attack mean anything for us or should we just ignore it and have another cup of Starbuck’s?  Consider this: ever since President Obama was elected, Americans have been arming themselves to the teeth.  Sales at Smith and Wesson have soared.  We have a new political party – sort of – the Tea Party. They are the party of “just leave us alone”. They don’t want to pay taxes. They don’t want national health care. They don’t want the government to do anything for them or to them. They want the government to just go away. The most popular person in the Republican Party is a dimwit from Alaska. The sole role of the Republican Party, since W left the White House, has been to obstruct everything the Democratic President wants to do – everything. It is not a question of what is good for the country. It is all about power, and it is most certainly not about what is good for you.

The country’s government is in gridlock. The only thing our government is able to agree upon is war. Who shall we bomb next, and when shall bomb them?  It’s good business for the defense contractors of course, but it’s not clear that we have Osama bin Laden too worried.  Or, that we even know where he is, for that matter.  What we have is the ultimate proof that President Eisenhower was right about the “industrial-military complex”, but does anybody really care? Certainly not Congress.

We have become a polarized country, perhaps dangerously polarized. Half of us want nothing to do with government, and the other half wants government to solve all of our problems. The first half thinks the second half are a bunch of naive fools. The second half thinks  the first half are lunatics. Meanwhile the oligarchs who run this country are busy having laws written to help their businesses. Tax laws are being written to give a unique advantage to certain types of businesses but not others, and certainly not to individuals who really have no power in this country at all. That’s because we are a republic and not a democracy.

The suicide pilot was not an idiot.  He was not a fool. He was not insane – he was desperate and he was angry. Sounds a lot like half the country right now. It’s probably appropriate that this incident happened in Texas, that most Republican of states. The Governor of Texas has recently talked of secession from the Union. He’s had it with the United States of America.  So, while the FBI scrambles to cover up that which everybody already has seen, and the rest of the government will undoubtedly scramble to portray this as an isolated incident perpetrated by a nut case, the American people may well be pondering something else.

Is this the canary in the coal mine?

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