16.1.3 Benefits of negative interest rates for the rich
So, you !#**@..!! want the government to rob us of our hard earned money ? ( again)
How on earth could small business owner benefit from taxation of his savings ?
Well, if you think about it bit more deeply, you will see that substantially.
There are 2 aspect to bear in mind:
- rising concentration of ownership
- alternative in quantitative easing or recession
As in today´s world 80% of income belongs to top 5%, you are participating in a game in which your chances of winning are slim. If that 80% of income is not distributed in some way back to the economy, your business will have no customers with money. And this is a reality.
It is like end game in poker, or monopoly. Majority of chips ( streets, hotels) are already owned by the winning player. You can continue playing, but if you are not an idiot and this is not your first game you know that the game is already decided. Few more rounds but the outcome is already given.
It is surprising to see how educated, rational thinking businessmen would declare end of game in any of these board/card games but continue to play real game of business against same odds.
If there is no way of giving back at least some „chips“ back to the game, it loses the point.
And direct taxation of savings,with clearly defined progressive tax bands is exactly that.
You, at lower tax band then top 5% would benefit more because your customers would receive more money from top 5% than from you and your business would get a significant boost in return.
The alternative ( to avoid the recession, in which small businesses go bust among the first) is quantitative easing.
But as distribution of income and wealth is as is, from each freshly „printed“ 60-80 billions 80% goes to the richest 5% !
And they can use it at will, even against you.
Have you ever wandered how can your competitor belonging to big chain spent so much on advertising or keep selling for months seemingly below production costs ?
Well, they have the resources from QE, the majority of them and YOU DON´T !
So if you support QE, you are indeed giving your competitors billions to be used against you.
Naturally if you don´t want to be just owned by top 5% and your life being dictated by them you should object to such uneven distribution of cash.
So even direct taxation might look like no go for small – medium size businesses, in reality it would help them by leveling the playing field, by distributing more buying power from top 5% to their customers and so enabling their profits to rise.
Without negative interest rates, all you have is just an END GAME. An you are not the winner.
With negative interest rates, the GAME can continue forever and your chances of winning are increasing with each tax round.