Most of the big funds that had long-term gains this year have sold or are still selling to lock-in these lower tax rates before year-end. This is a phenomenon that has been caused by the Sovereign Debt Crisis and Obama being just brain dead when it comes to economics. Even stocks like Apple (AAPL) have been as a primary example of things affected by the rise in taxes for next year.
The problem with politicians is they have ZERO practical experience in the real world. France is destroying itself faster than normal. They are just slamming their foot to the floor on the accelerator and steering directly into a head-on collision even lowering the retirement age on their unfunded liabilities. The rich are pouring out of the country and the politicians think they should be patriotic and hand over 75% of all income. Actors, sports figures, and businessmen are bailing out. Looks like we may be headed for another French Revolution when government can’t pay because France gave up their sovereignty by joining the euro. They cannot hyperinflate their way out. They do not control the issue of the euro unilaterally.
In Germany, the socialists want to take all the money of the rich and drag their dead carcasses through the streets. Nobody is even willing to look at where this road leads. They cannot see that there is no end game here. This is not a short-term emergency like a war. This is a total systemic break-down in the global economy and these people are like a 2 year-old driving a car with no clue what they are doing or where they are going.
More than 50% of the civil work force in Germany is employed by the government. They do not understand that the term “public servant” means just that – someone who produces nothing toward the national wealth and is dependent upon extracting income from those who work in the private sector. Yet the state promises them pensions, and that means those that work must earn and save twice as much to pay for the other half that produce nothing. And this is Germany! The red tape in Germany is so bad to start a business they have one of the lowest entrepreneur levels in Europe because the majority would rather work for someone else. In Southern Europe, jobs are rare but entrepreneurship is high contributing to lower tax collection rates. In Germany you actually pay taxes for next year in advance based upon what you made the year before even if your income drops by 50%. Why start a business under those terms? The state borrows from you without interest.
What the hyperinflationists have missed is how aggressive governments are getting with tax collection. This is how all nations die – by their own hand. On the one hand there is a decline in purchasing power of the currency (inflation of assets) but this is offset by rising taxes and draconian enforcement that causes the hoarding of wealth and an economic decline in the velocity of money. So you get the worst of both worlds – stagflation.
Unfortunately, it does not matter how much evidence I present. You will never convince government to review their actions and avoid the death by suicide. This is about them retaining power – not about society surviving. They really do not give two-shits about you and your future. This is all about them retaining power.