Socialism- U.S. Treasury Style

According to the WSJ's article New Loan Fix Is Unlikely the Last FDIC Plans Mortgage Guarantees; Lawmakers Consider Pressuring Reluctant Investors- the government wants to take losses on mortgages so that holders of mortgage based derivatives will be protected and will agree to a revision of the loan terms of the underlying mortgages. Spread the pain to the taxpayers, but deliver the gain to the greedy and the stupid.

According to Bloomberg, The U.S. Treasury is considering taking stakes in insurers as it prepares a new round of capital injections targeted at regional banks and other financial companies.

The nuclear assault launched by the Treasury and the Fed on the financial crisis will do very little to address the underlying problem - the systematic destruction of the working class by the system that has rigged institutions and rules to favor "investors" over workers, and "capital gains" over wage earnings. Until "wage earnings" are respected, and "investment gains" are taxed at a much higher rate than currently, and investors settle for much less returns on their capital and let firms invest more, the crisis will just morph. The bankers will just create one bubble to replace another.

Not all dollars are the same- to the tax woman

The WSJ reported today that Sen. Obama provided more details about his tax plan. Specifically,
Sen. Obama plans "to raise tax rates on capital gains and dividend income from 15% to 20% for individuals and families making more than $200,000 and $250,000, respectively." He also plans to "levy payroll taxes on earnings above $250,000 at a rate between 2% and 4%, though that increase wouldn't occur for at least a decade. Right now, payroll taxes, used to fund retirement benefits, are levied on income up to $102,000."

One of the biggest 'achievements' of the Congress and Bush administration over the past eight years has been the capping of taxes on capital gains and dividends, and eliminating the tax on gain from selling a home that is a primary residence (with some more conditions). So, a person who works hard and makes a $ that gets reported on a W-2 pays a lot more in taxes than a person who also makes a $ through dividends or capital gains (1099-DIV or 1099-B or other such form). Wage earners are being heavily burdened- especially those at the lower end of the pay scale. There is NO reason why payroll taxes should be capped - every dollar should be treated the same way. Similarly all income, irrespective of the source, should be taxed the same way, because the government provides services to all people.

It appears as if Sen. Obama, in order to appease Wall Street, is not willing to do what is fair and unprejudiced in the rigged world of taxation.