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    • The Wages Of Embarassing Elites Are Death
      Everyone remember the Panama papers? A leak of bank records showing that the ultra-rich are hiding massive wealth, tax-free and often breaking the law to do so? A rather weak set of laws designed to allow tax avoidance by rich people, at that. Found out the other day that the reporter who broke the Panama Papers story was killed by a car bomb. Coincidence, n […]
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Wednesday: Rent and Taxes

You MUST pay the rent!

You MUST pay the rent!

Simon Johnson had a cryptic post at baselinescenario the other day about money managers and shareholders.  Naked Capitalism followed it up yesterday with a post about John C. Bogle, head of the Vanguard Group and his proposals for a new fiduciary relationship between money managers and their customers. One thing I found astonishing was that pension funds are charged something like .08 for a transaction but mutual funds of the type that many of us are forced to put our 401K money into are charged .61 per transaction.

In the past couple of days, I’ve been reading more references to the term “rent”.  In this context, rent is not simply what we pay to our landlord to keep a roof over our heads but, as I’m interpreting it, rent is a fee charged by an entity to make use of a service that they have exclusive control over.  (Dakinikat can correct me on this)  For example, when you use your debit card, you pay a transaction fee and that is a type of rent.  I’ve always assumed the rent in this case goes towards servicing the machines and the bank makes a ginormous profit.  Then there are those transaction fees extracted from us by our 401k managers.  And when I think about it, rents are all over the place and costing us more and more each year.  Think about your cell phone bill.  Ok, *don’t* think about your cellphone bill.  There are ridiculous fees for everything.  You get roped into a monthly charge for 400 minutes but find that unless you purchase unlimited texting, every SMS you send is going to cost a ridiculous amount of money even though those text messages hitch a ride on cell signals at virtually no cost to the phone company.

Then I started to think about all the privatization we went through in the Bush Era.  Remember when the Republicans were ready to privatize the national weather service to something like The Weather Channel?  Think about that for a moment.  We pay taxes already to keep the weather service and its spinoffs like the hurricane watchers in business and Congress was negotiating with a private company, who would have charged us additional fees, to provide that service for us.  But I think it’s even worse than that.  I have heard horror stories about companies such as Accenture bidding on projects like taking over human services databases in Texas and making a shambles of it.  I know from an insider how the IRS has been downsized and portions of its services sent to private contractors for high fees.

Funny how it seems like our taxes never appreciably decreased after Bush and the Republicans made government smaller, especially for those of us who live in states where the cost of living, and consequently salaries, are high.  I supposedly have more money in pockets, money that I can decide to spend better than the government and I spend a lot more of it in rent that every service provider manages to extract from me in little dribs and drabs.  It adds up, substantially.  And today, when I do my taxes (yeah, yeah, procrastination), I will once again be amazed that I fork out so much money and get so little for it.  I *thought* I was paying much less in taxes than my French colleagues until one of the expats told me that taxes here are much higher when one accounts for what she would get for that money in France.  Little things like decent healthcare, generous maternity leave, tuition at a public university that is really just a token.

But in any case, I’m sure it is no accident that rents to the private sector have increased to the benefit of our capitalist masters of government.   It makes me pine for socialism.