Feudalism
I view feudalism as a natural system of order for any society. It eventually happens in any political philosophy. It is a default society. Communism just happens to be the most efficient form of government to lead to feudalism. That is because Communism is the ultimate feudal system. All people serve the central government. And the only path to power is through the Party.
That does not mean a republic is immune from this natural collapse into feudalism. And our founding fathers tried to establish a Republic, free from this. That is why they tried to establish a balance of power. In doing so they created a weak feudal system. The Representatives were to control the physical resources of the country (money). The Senate would represent the holdings of land (States). And the executive the federal military. And each would have to seek approval of the other to function. But I digress.
We have always had a romantic notion of Feudalism. Who is not intrigued by the shining, valorous knights. And nobody would complain about being a King, Queen, Princess, or minor Lord. Look at all the successful shows and books that portray feudalistic themes. Game of Thrones, Camelot, and Downton Abbey. Of course, the last was the remnants of the feudal system, just the withering remains of an earlier day. Nothing last forever. What we fail to see in these shows and books is how the almost 90% of people without title live. For most it is a grim life with little chance for advancement unless you are useful to the upper crust. Yes, we see quick snatches of sterilized life among the rabble, but not the true day to day existence, unless it is to show a very benevolent Lord or Lady. After all, unless you are a history buff, who would want to read the real life stories of the lower class. Let alone fantasize about being one. Pretty boring stuff.
The only reason I am discussing this, is that I believe we are headed towards another form of Feudalism. We may not have Knights and Kings. But we do have the consolidation of wealth and political power. And the funniest thing about this is that we are creating it under the guise of taxing the rich.
The progressive income tax code has been the biggest consolidator of wealth in our lifetime. Not only has it lead to a far greater consolidation, much of it has also escaped the burdens of taxable income. Why worry about a 18% to 60% tax rate, when you can create a nonprofit foundation and pay 0% on revenues functioning within the non-profit organization. That means you have to give up ownership of this money. However, you still have control of it, and if you structure it right, you can pass on control to heirs. And control is just as good as ownership, if you don’t have to share control. So the new Downton Abbey's are no longer ancestral homes and lands, but huge foundations that stretch globally. They can invest and buy land wherever they please. This also allows them a bit of freedom. After all they are not tied to any specific location. Unless, they choose to be.
Not only have the wealth re-distributors created more rich and powerful organizations. In their greed for wealth and power they have created nonprofits to protect their own wealth and accumulation of power. This in turn has opened the door for the wealthy to stash their fortunes out of reach of the hands of the government. Leaving less taxable income for the government to collect on. With more money being made, the government still faces declining sources of revenue as more of the rich decide to send their money abroad, or create tax free vehicles.
Feudal societies arises from the need to protect the resources of a small group of people from bandits and barbarians. Most arise from the vacuum of lawlessness. The strange twist is that this new form of feudalism is created from the need to protect themselves from laws. Laws that are designed to steal money from them in the name of the greater good. So the rich surround themselves with a new form of Knight. These Knights tend to drive BMW’s and have attended prestigious schools. There weapons and shields are the laws written to control people. And their new Vassals are the politicians and political parties who write the laws.
The way to fix this is really simple. Competition. Not the competition that makes more confusing laws to try to squeeze more money from the people. But, true competition. The competition that says that your tax will be less than what it cost you to avoid it. How many rich people would go through these complicated expensive rituals of shielding their wealth from taxes, if the cost was more than the tax.
That is why I believe The CUT Tax (Currency Use Tax) has the ability to accomplish this goal. I believe the compliance cost associated with the current tax code far exceeds the amount of revenue collected by the IRS. It is time to get real and see you can not force people to pay more, just because you believe they have too much. Why not let them make as much as they like and collect a small tax that is the same percentage as the the average citizen. Then maybe the tax revenues would go up.
