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One of the ironies of the US tax code is that in terms of absolute numbers large numbers of corporations don't pay corporate income taxes because they claim profits as personal income.  The US S Corporation is the most common here.

By separating out the charge for limited liability insurance from the idea of taxation, the double taxation argument collapses, and you can defeat the neo-libs in the market.  Because no private insurer is going to offer policies that limit liability to market capitalization at the rate that the government can.

Make the neo-libs eat their own shit.  They want the market to provide these things, let them try to show that it can be done.  Then laugh when they are forced to come crawling back to the government to ask that they be allowed the privilege of what they now feel entitled to.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Sep 21st, 2008 at 01:39:13 PM EST
[ Parent ]
a lot. and I like the discourse you use to justify it.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Sep 21st, 2008 at 02:08:03 PM EST
[ Parent ]
Okay - but can we get one thing clear here?

The neolibs don't give a crap about markets, or about small government, or about any of the other talking points they vomit up regularly. There's a cadre of useful idiot apparatchiks who have been through the MBA mill who will repeat - and believe - this nonsense on cue because it makes them feel grown up. But the real players know the talking points are a show for the gullible and have no more substance than a McCain stump speech. (You think it's a coincidence that Bush, Palin and McCain lie about everything?)

The real aim of this kind of 'conservatism' has always been to loot national economies using whatever ideological or military excuses come to hand. This isn't conservatism, it's old-fashioned imperialism, with the empire as the entire planet.

The 'crisis' was manufactured by Greenspan, Gramm, Paulson and others. Greenspan may be a toad but he's not stupid, and the regret and woe which he's wailing out now, have to be contrasted with the palid and oily reassurances about the bubbleicious state of all things financial he spewed out during his term.

He was lying then, and he's still lying now. He knew damn well what was happening, and he didn't just ignore it, he helped engineer it.

So this is not a financial crisis, it's a constitutional crisis. It doesn't need a financial remedy, it needs a restoration of the constitution, and jail terms for the thugs who deliberately ran the car into a wall so that they could make an insurance claim on a shinier one.

No amount of financial re-engineering is going to fix this problem unless law and order are restored, and most of the population decides that Wall St's 'serious people' are thugs and criminals in sharp suits. Once that reality has sunk into public consciousness and cleaned out some of the festering corruption from the Anglo political systems, it may be possible to start legislating fixes. But the real need now is for pressure on Washington and London to start moving back towards genuine populist democracy.

Obama may make some tiny baby steps in that direction. But it needs a much wider cultural change, and even with the current sense of outrage among some of the left in the US, I'm not sure that we're done with the disasters yet.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Sep 21st, 2008 at 05:23:25 PM EST
[ Parent ]

I'm not sure that we're done with the disasters yet.

I make no claim to clairvoyance, I don't read tarot cards, but I've got this grand gut feeling that the bigger disasters are just waiting offstage, regardless of what transpires this week.


... start moving back towards genuine populist democracy.

Do we do this before or after we find and slaughter all of the ultra-rich Republican types, because while they're  still alive, they will use ALL of their substantial resources to keep things going just the way they are now.

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Sun Sep 21st, 2008 at 06:52:06 PM EST
[ Parent ]
TBG
There's a cadre of useful idiot apparatchiks who have been through the MBA mill who will repeat - and believe - this nonsense on cue because it makes them feel grown up.
They also believe it because it makes them feel employed.  One would have to have a gag reflex set at infinity to work for these folks and not believe the official line.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 22nd, 2008 at 12:00:02 AM EST
[ Parent ]
I think you're underestimating the degree to which many at the top believe their own propaganda. For example, I am close to certain that Greenspan does. Cheney a bit less, but to a large degree probably does as well. The fact that they consciously lie and steal is not evidence against belief. In general I tend to believe that people overestimate the cynicism of the elites, in any system, of any persuasion. Very few people are happy thinking of themselves as bad guys. Tough guys, people who are willing and able to cut corners to do what needs to be done - yes. And also feeling they deserve a bit extra for the wonderful and important job they're doing, that too. But pure mercenary opportunism isn't that common on the big stuff. When there are contradictions between actions and internal ideology, they rationalize things to themselves as necessary exceptions.
by MarekNYC on Mon Sep 22nd, 2008 at 01:20:50 AM EST
[ Parent ]
Ummm... just checked.

The first reference to a Limited Liability Levy I can find was thanks to Colman's provocation which gave rise to this debate back in January 2007

Iraqi oil etc

complete with the obligatory fisticuffs with HiD.

More recently in the

Risk Risk

thread on 5th April this year I posted this


Well what happened is that partners did (and still do, in the large number of professional partnerships still left unconverted to LLP's)insure themselves against these risks using Professional Indemnity Insurance.

These premiums started to rise rapidly, and led to the demand for limitation of liability. The government refused until they were essentially blackmailed into doing so when PriceWaterhouse and Ernst & Young paid City lawyers Simmons & Simmons around £1m in respect of the legislation that went through in Jersey in 1997 for a Jersey LLP.

Prem Sikka tells the story.

Essentially the UK government is handing out free insurance - as they do to every shareholder in a limited company.

ie the LLP does not quite "do way with that" it socialises what were private risks.

In my view, there should be a "Limited Liability Levy" or tax applied to gross revenues of any entity which has limited liability.

Jersey actually got one thing right in the end. They insisted on a bloody great bond being lodged by LLP's (either £5m or £10m) and this somewhat limits their appeal as a vehicle.....

Plus a good few more references by me in the last couple of weeks....

So, more power to MfM's elbow in developing the argument so much better than I could, but I think I can claim precedence on the concept...

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Sep 21st, 2008 at 09:58:23 PM EST
[ Parent ]
I just assumed MfM was building on what you had written on this site over (apparently from your search) the last 20 months...

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Mon Sep 22nd, 2008 at 06:44:38 AM EST
[ Parent ]

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