Walmart

When citizens cry out that the rich should pay more taxes that is countered with the fact that the top one percent of wage earners pay 40% of all income tax but this is misleading. The rich do pay a disproportionate amount of income tax but many rich have very little taxable income. This is because most of their income comes not from wages but from assets. The children of Sam Walton do not earn wages and thus do not pay income tax. They live off of dividends from their Walmart stock where they pay capital gains tax and pass on their assets tax free to their heirs when they die. The four children of Sam Walton own 4 billion shares of Walmart stock valued at $250 billion. The Walmart dividend is 75 cents per share or $3 billion per year to the four children. They never touch the principal and it passes tax free to their children when the die. An investor who bought Walmart stock in 1972 for $1,000 would have $11.3 million today and if they died this would pass tax free to their heirs. This is because capital gains tax only come into play when the asset is sold. At death it has a stepped-up basis and escapes income tax. They skirt the estate tax by transferring ownership to trusts. The top one percent owns $55 trillion in assets and the government collected only $32 billion in estate tax last year.

Stepped up basis

The major financial result of 50 years of globalization was the movement of wealth up the food chain. The statistics showing the inequities in wealth and income distribution overwhelmingly confirm that there is a serious problem. It is now to the point where young people are beginning to see socialism as a way to redistribute wealth. While the progressive income tax system tries to equalize things by taxing income, this will not work because the super-rich derive their income not from wages but from assets. There are a number of ways to get at wealth created by assets. One is to tax unrealized capital gains. When an asset increases in value there is no tax until it is sold. So, a rich person just holds on to the asset until they die at which time it gets a stepped-up value at the time of death. Uncle Harry bought 100,000 shares of Amazon stock in 2000 at $6 per share and he died last week with his stock worth $65 million. That stock now passes to his heirs with zero income tax and zero estate tax. It the law required that people sell appreciated stock at the end of each year, this loophole would not exist and Harry’s heirs would not be able to start the whole process over again, to pass on to their heirs.

Executions

Many people in the US oppose the death penalty and often times do so with public protest. In 2025, 47 people were executed up from 25 in 2024. Mostly going unnoticed were the 2707 executed in other countries around the world including 2,159 in Iran. This included deaths from drug offenses and acts of political dissidence. Iran not only treats women as second-class citizens but executes those men or women who disagree with government policy.

2028

Looking ahead to the 2028 presidential election several things are clear. The democrats will be unable to drag themselves to the center since all of the party’s energy is to the left. Will they be unable to disconnect from the cultural items like men in women’s sports, gender surgery on minors, gay issues, identity politics and badmouthing republicans long enough to discuss policies. They will discuss the economy but their solutions to problems will be all about taxing the rich and expanding government benefit programs. The republicans will bring up law and order, deportations, fair trade, lower taxes, secure border and energy independence. They will concentrate on creating new industries through free market innovation (AI) and thus new high paying jobs. This means increased productivity which leads to low inflation and could be well underway by election time.

The future

“It’s not your father Oldsmobile”, was a slogan used back in the 80’s to illustrate the new engineering in the auto industry. This is an apt saying for what is happening to manufacturing, as the US goes into the era of reindustrialization, as globalization comes to an end. In the past workers in manufacturing plants were assigned repetitive task as they stood on assembly lines and it was called a factory job. In the new plants robots will do these jobs and the employees will shift from manual assembly to managing advanced technology. Workers will operate, program, and maintain robotics and AI systems, analyze real-time data dashboards, oversee quality control, and solve complex, high-value technical problems. These jobs will be shared by technicians and engineers. The techies will be high school grads who will learn on the job. It will be an apprenticeship program much like unions have. More training leads to higher skills which leads to higher productivity which leads to higher wages. The US plans to double its industrial base over the next ten years and it will be a wild ride so get ready, the world is changing.

Working class

The end of WW 2 saw the beginnings of globalization. For forty years between 1955 and 1995 the democrats controlled the congress and then the republicans took over for the next 12 years until 2007 and that was the end of globalization. During those years both parties, but mostly democrats, claimed to be the party of the working man. It was during those years that the foundation of the working man crumbled as manufacturing jobs were shipped overseas. Added to that was the structural disadvantage with tariffs. The US followed in the believe that free trade was best for all and that is the case but while the trade was free it was not fair. The US had tariffs of 2 to 4% while the rest of the world taxed US imports at 5 to15%. Many of the US trading partners used child labor, had few environmental laws and used mostly coal power. On top of that the US paid more than its fair share for NATO, the UN and all of its affiliates and used its military power to protect all allies. This system expanded the income and wealth gap and those in control want things to remain the same but all that is changing. The new way will be free and fair trade, countries paying for their defense and manufacturing jobs coming back home. This will promote the working class with good jobs.

Germany today

In 2015 in the midst of the Syrian Civil War, Angela Merkel, Chancellor of Germany opened her heart and her borders to a million refugees. She was praised for her compassion and the press created a saint like aura around her. These people were Muslims and that made her even more the humanitarian. Today, things look quite different. The Muslim immigrants failed to assimilate as the barriers of religion, language and culture were too great to overcome. The schools were crowded with students who could not speak the language, the healthcare system was bogged down, the price of housing escalated as demand exceeded supply and gangs formed which led to high crime numbers. Today the German government is changing direction. Germany is actively deporting migrants and has significantly increased its removal efforts as part of a nationwide crackdown on irregular migration. The government has enacted stricter legal reforms and expanded police powers to remove individuals without legal status, including convicted criminals. The same thing is happening in countries across Europe.