The poor and the middle class pay more in tax than the rich.

The poor pay much more than there fair share in federal taxes. To state otherwise displays ignorance, stupidity, or a lack of integrity.

Federal income tax generates less than 50 percent of all federal revenue combined. Where then does the other 50 plus percent of federal revenue come from?

We all know the answers, but few are willing to expose the hidden taxes that the overwhelming majority at the bottom and the middle pay to the federal government.

What are some of the hidden taxes that the masses in middle and the poor must pay?

Sin tax
Gas tax
Federal payroll tax
Utility tax
Lotto tax
Import tariffs

There are many others, but ill save the “best” and the most pernicious tax for last. This stealth tax destroys the poor and the middle class, because they bear the brunt of it.

Lest I forget, we can’t forget about the sales tax which falls on the majority of the populace which includes both the poor and the middle class. As the poor and the middle purchase goods and services on trillions of transactions the nation’s tax coffers are filled.

Also worth remembering; while federal income taxes are avoided by the poor, State and City taxes may still be collected.

So, what is this silent deadly tax you ask?

Anyone that knows how the Federal Reserve works, knows exactly what this hidden tax is, and who it affects the most.

The inflation tax!

The poor pay an unconscionable percentage of their incomes on too many flat taxes, which include sales, gas, import and inflation. If you look at the entire picture, it’s no wonder why this forces the government to refund a small amount of that money back in the form of a refund.

To argue that the federal income tax that is paid by wealthiest Americans is worse, or less fair than the inflation tax that is paid by the poor, and the middle is a piece of dung.

Simple math.
Do 99% of the US population purchase and consume more than the top 1%? If so, who bears the brunt of the inflation and consumption taxes?

There is no contest on which class of American pays a larger percentage of their income on taxes, and which class of American has been able to enrich themselves because of minuscule tax rates.

An important fact to remember is that most of the top 10% aren't rich.

One could make an argument that only the top 1% to 2% are affluent but the other 8% fall into the lower middle class strata. Once the remaining 8% lose 60% of their incomes to taxes while the rest goes to living expenses- whats left? The bottom 8% of the top 10% that pay federal income tax are probably just a handful of paychecks away from financial devastation.

As far as sin taxes go.

While it is true that sin and the lotto taxes can be avoided, the fact remains that the lotto has generated over 100billion over the past decade for education.
If the lotto did not exist, that money that is voluntarily given would have to be taken (taxed) from all of our pockets.

The lotto has also generated tens of billions in federal income over that same decade in taxed winnings.

Please, do the math and do not dismiss what i have written so quickly.

Federal income tax only accounts for 45% of all federal revenue. Where does the rest come from? Part of that remaining 55% is mostly hidden, and it doesn't include inflation. The remaining 55% of federal income is paid for in part by poor, and middle class Americans when they purchase goods and services on a daily basis.

Inflation is a hidden tax that isn't reported as federal revenue, so it isn't as easy to ascertain what the rate is and who it affects the most.
Inflation isn't easy to understand at first, but it is one of the most egregious and draconian of taxes once you wrap your head around what it does to the purchasing power of our dollars.

Commodity inflation without wage inflation is what this country has had to endure for the past decade. Inflation has destroyed the middle class and has murdered the poor.

Examine over multiple years and you will find non existent wage growth, compare that to the CPI index, price out what gas, food have done over the same time span.

When was the last time they gave a cost of living increase to Social Security recipients?

The government has borrowed money from the FED and dumped it all over the world. A large part of our debt went to the richest bankers but all US citizens have to pay for that monetary creation in the form of a diluted anemic dollar.

Do you homework on inflation, the poor and the middle class pay dearly for it. The poor pay more in total taxes than the rich do. They pay more in total revenue and in total percentage.

Next time someone tells you that the poor pay no tax and the rich pay 50% of all federal income taxes- yell at them and tell them the truth!

Buy Gas just in case the Strait of Hormuz, and the Iranian Threat might be more than bluster.

If you can buy a few gallons, and store them away, that might be the ideal solution. This is certainly not the safest option or the most convenient for the vast majority.

For the rest of us, buying options is probably the way to go on Gasoline.

Take a look at (UGA) United States Gasoline Fund.

The United States Gasoline Fund, LP ("UGA") is a new way for investors and hedgers to manage their exposure to energy.

The United States Gasoline Fund LP (UGA) is an exchange traded security that is designed to track in percentage terms the movements of gasoline prices. UGA issues units that may be purchased and sold on the NYSE Arca.

I am not recommending you go out and bet it all on this. But, it might be prudent to hedge your gas costs against headline risk- just a little.

You can buy out of the money calls on UGA- take a look at the Feb 18 2012 with 51 Days to Expiration.

The 65.0 strike Call can be purchased for .10 cents.

If the Iranian scenario does go bad, gas is going to double, and those calls will be worth $2 to $3 bucks- each.

Spending $100 on these calls to protect your short term fuel costs is a modest proposal that could potentially pay off for the long haul.

That hundred you wagered could be worth a few grand if things go to hell in hand basket.

Ladies and gentlemen, we can always change things for the better. Just look at SOPA vs godaady.

Close to 40,000 customers have left godaddy in the last two days because of their support of that disgusting bill named SOPA.

Officially, close to 100,000 sites have moved, the whisper number however is over one million.

Godaddy was staunch and unapologetic in their support of SOPA, up until a few weeks ago that is, today they seem very contrite.

They are actually reaching out to customers that have moved their business elsewhere or those that might. While they have reversed their public position on SOPA- many internet users remain skeptical on their true motives.

Wikipedia is in opposition to SOPA, they threatened to move off of godaddy on this issue. Throughout it all, Godaddy remained belligerent on its support of SOPA. Almost 40,000 paying customers decided they were right and that godaddy was on the wrong side of the aisle- Godaddy has since reconsidered their position.

I'm proud to say i moved my sites off of godaddy, and i convinced many of my friends to do the same.

Do you know what makes this story just a little bit sweeter? Bob Parsons Ex CEO and founder of godaddy is a vile Grinch- he is a proud member of the extreme right wing.

Collectively, we all make a positive difference, and we do it by shouting the truth from the rooftops. Expressing our opinions on what's on the right side of morality, and what's wrong with with the other side, that's one of the best gifts we can give to humanity.

Happy Holidays!

Must watch video on SOPA.

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If you own physical gold and silver you may want to hedge it with options.

There are plenty of investors that don’t trust ETFs for as a substitute for owning the physical metal in hand.

While this is completely understandable, it doesn’t’ mean that you can’t hedge what you own by using options on the GLD and SLV ETFs.

If you own thousands of dollars in precious metals, you are completely unhedged against severe market fluctuations.

Silver in particular displayed a lot of volatility in 2011, it had multiple 30% swings to both the upside and the downside.

The roller coaster ride was enough to make most owners a little bit squeamish.

The solution: Options.

If we take SLV as an example. We can purchase an (otm) out of the money put with 100 days till expiration, for .15 cents.

The catch: the put Is 30% out of the money.

That means you have unhedged for a 30% drop in the next 100 days, however, if silver were to drop precipitously the put would increase in value. The put would increase in value even if the spot price of silver didn’t fall below the strike price.

The reason, increased volitilty would make the put worth more than you paid for it. And at .15 cents, its pretty cheap protection for the next 100 days.

Hedging Gold (gld) is a little different. Gold hasn’t been as volatile as silver but you can still purchase a put that is 25% Out of the money for .20 cents. The question is though; with gold’s drop from 2000 does anyone expect it to drop another 25% this year? Either way- purchasing one put for 20 dollars, can protect your expensive gold holdings from a catastrophic drop.

I don’t favor purchasing puts less than 100 days before they expire, and I don’t believe the premium you have to pay for at (ATM) at the money put is worth it.

You are long term bullish on the metal, so it makes little sense to spend a ton of money to marry puts to your position at all times.

But, when the market is uncertain- owning a put is akin to owning insurance.

You insure all of your most precious assets, your precious metals must be thought of the same way.

If silver were to fall, you can sell the put for a profit, and purchase even more silver with it at the cheaper price point.

If the option expires worthless, as most do, then it would be the same as the premium you pay in your insurance policy- even if you never use it.

For bullish investors, I don’t calls work the same way. Instead of paying the premium for a call, you could just buy the physical. Most options expire worthless, so instead of wasting money on a call- you could own the metal in hand.

Its important to remember:

These puts are 30% out of the money. That means if gold or silver drop 15% your puts aren’t going to be worth much. The 15 dollar puts might be worth 100 bucks. Expectations need to correctly set.

Wages as a percentage of corporate profits.

This chart paints an ugly picture.

Corporate profits are at an all time high, personal income and salary for the 99% is at an all time low.

Why the disconnect? 

The top 1% which include the CEO's directors, and upper level managers are siphoning more of the salary pie than they used to receive as compensation. 

What's left after the executives take the lions share is a tiny fraction. The small crumbs that are left are split amongst offshore workers that make pennies a day, and the American laborers that are forced to work for salaries that are barely above minimum wage.

Before the Ronald Reagan revolution- that was the beginning of the destruction of the middle class, executives in the 1% took 10% of the salary pie, now they take 40% of all wages. The middle class in the 99% now has 30% less of that salary pie to divided between themselves. Its even worse when you consider anther 20% of that income pie goes to workers in India and China.

If you thought Bloomberg even had one shred of decency- think again.

A Living Wage, Long Overdue
Published: December 25, 2011
Published in The New York Times.

New York City provides hundreds of millions of dollars a year in taxpayer-financed subsidies to private developers. It is only right that the jobs created by those projects pay a decent wage. The Fair Wages for New Yorkers Act, widely known as the living-wage bill, would nudge these employers in the right direction.

Get that- middle class NYC taxpayers provide kickbacks to developers so that they can build fancy buildings for wall street big shots and others.

The bill now before the City Council would require future development projects that receive $1 million or more in discretionary financial assistance from the city to pay $10 an hour plus benefits for full-time workers and $11.50 an hour without benefits for at least 10 years. That may not be much, but it is an improvement over the minimum wage of $7. 25 an hour.

The benefits sound fair.

Mayor Michael Bloomberg is fighting this change, arguing that a wage increase might scare off new developments and cost the city thousands of lower-paying jobs. That has not been the experience elsewhere.

First off, $7.25 isn't a living wage in New York City, it hasn't been for years. Meanwhile, on the left coast, the other expensive city, San Francisco, just raised their minimum wage for ALL workers to $10.24 an hour.

Once again Bloombito is talking his book:
"But, if we don't give these fancy billionaire developers millions in kickbacks, they will build those penthouses that sell for 30 million in Cincinnati!
We can't make these job creators pay another 3 bucks an hour to poor people- that would cut into their tens of millions in profits."

Disgusting!

http://www.nytimes.com/2011/12/26/opinion/a-living-wage-long-overdue.html