Monday, January 20, 2014

Marc Faber on income inequality, and taxation on rich

Marc Faber says that money printing helps the rich by inflating their asset values. Even if cost of living goes up, it is a small portion of their income.

"We have to distinguish between the Financial economy, the economy of the well to do people that benefit from rising assets, painting, art, wine and high end properties in the Hamptons and the average typical household or working class people. The fed's policies have led to a lot of problems around the world. They are partly responsible for energy prices are where they are, from $10 from 1999 to now around $100 a barrel. Food prices are up."

Meanwhile when the basic cost of living goes up, it has a big impact on the non-wealthy

"For the poor people it has an impact. Some people in the Lower income groups spend say 30 percent of their income on transportation, gasoline, electricity. And the problem is people like Bill Deblasio say, 'you know whats the problem, all these rich guys... because of these rich guys, you are poor, they take advantage of you, so lets go and tax them'."

Marc remarks that once taxes are introduced it is hard to take them away

"IMF has come up with a paper in Europe that essentially the well to do people should pay a one time wealth tax of 10 percent. But I can assure you one time wealth tax will become a every year tax."