Sunday, December 18, 2011

The US British Oil Empire pt 1

Too many pieces of the puzzle fall together to connect war for energy while it is disguised as a war on rival ways of life that threaten our own. Communism followed by terrorism.

Amplify’d from www.oilcompanies.net

The New U.S.
-British Oil Imperialism

Part 1





The New U.S.
-British Oil Imperialism

Part 1






By
Norman D. Livergood



     The American and British ruling circles have
been engaged in a policy of military imperialism for several centuries. The
American revolution was fought to bring the United States under new, non-British
ruling circles, with the new regime sold to the public as a democracy.
In the twentieth century, these American ruling elites have revolved around
the Rockefeller, Brown, Harriman, and Morgan family dynasties. The Bush family,
beginning with Prescott Bush, have served as satraps of the Rockefeller, Brown,
and Harriman interests.

     As
we've seen, in earlier articles on these imperialistic rulers (Part
1
, Part
2
), the British and American ruling cabals decided that the energy of
choice for the world would be oil and natural gas (not coal)--just as the
drugs of choice would be alcohol and tobacco.





      To overcome the problem of his oil holdings being broken apart by the U.S. government in 1911, John Rockefeller set out to control the world's oil, gas, and nuclear energy reserves. World War I was the strategy of the world oil cartel (Standard, Shell, British Petroleum) to take over the colonies of France, Holland, Spain and Portugal. The engines of war now ran on petroleum-based products, so ownership of oil could now determine who won or lost a war--therefore who would rule the world. Oil, instead of gold, became the token of power.





     By 1919, the Oil Empire, not based on countries or nations, but on private corporations, now ruled the world.









     The Big Three oil cartel, which controlled oil in the Persian Gulf and southeast Asia areas, wanted to gain control over the vast oil reserves in the southern part of the Soviet Union. They financed the fascist regimes in Germany, Italy, and Japan with the hope that they would invade and control Russia. The Oil Rulers planned to defeat the German, Italian, and Japanese regimes and take control of the oil reserves in the Soviet Union. The Rockefeller circle also planned to take control of Persian Gulf oil from the British-Persian Oil cartel and seize control of southeast Asian oil from Royal Dutch Shell.





     The United States was brought into the second world war when in July 1941, President Roosevelt signed an embargo to stop all shipping to Japan. This was said to be in retaliation for the recent Japanese invasion of French Indo-China. Roosevelt's U.S. embargo cut off the Japanese oil supply, which would have quickly shut down Japan's entire economy. In late November 1941 the Japanese sent a written "war warning" through diplomatic channels to Washington, demanding that the embargo be stopped, or else American sites in the Pacific would be attacked in retaliation. That formal diplomatic warning was ignored and the U.S. made no reply. Just two weeks later the Japanese bombed the American embargo ships located in Pearl Harbor.





     In 1939 and '40, the Germans and Italians did not attack Russia as the Big Three had planned. Instead, German General Rommel rushed across North Africa to grab the Suez Canal and control all oil shipping through the canal. Rommel then planned to drive through to Persia and toss out the British from the British-Persian oil fields. Meanwhile, after a failed attack on Russia in 1939, the Japanese swept through Southeast Asia and seized all the oil holdings of Royal Dutch Shell. With the defeat of Japan in 1945, most of those Royal Dutch fields came under the control of Rockefeller's Standard Oil.









     Hitler had planned to capture the oilfields in Romania by 1939 so Germany would have its own supply of oil. This was accomplished. Then Rommel was to have captured the oilfields in Persia

by 1941, the oilfields in Russia in 1942. Only then would Hitler have sufficient fuel for prosecuting a war with the United States. But less than a week after the Pearl Harbor attack, the Japanese convinced Hitler to declare war on the United States. Hitler agreed only if the Japanese would attack Russia, since German troops were now bogged down in Russia and Hitler would gain strategic advantage if the Russians had to defend themselves from Japan on their eastern flank. When the Japanese failed to attack Russia, Hitler was driven out of Russia and now was without a fuel source. The Romanian oilfields in Ploesti were insufficient for Germany to carry on a war on two fronts, and Germany's war effort began to collapse.





     The last major German campaign was the Battle of the Bulge, in which Rommel was to attack the invading allies with his tanks, then capture the Allied fuel dumps. This would stop the American and British forces and obtain the necessary fuel for Germany to continue its war effort. But General Eisenhower ordered the Allied fuel dumps burned and Germany was defeated.









     At the end of World War II, the British-Persian Oil Company controlled the vast oil fields in Iran. The Persians had declared their alignment with Adolf Hitler's Nazi "Aryan Race" movement and were fully expecting German General Rommel to come rushing across Africa and "free" them from the British. They had even proclaimed their alignment with Hitler by changing the name of their country from Persia to "Aryan," (or "Iran" in the Farsi language), but the Germans failed to save them.





     To take control of Persian Gulf oil from the British, in 1954 Kermit Roosevelt, nephew of Franklin, led an American CIA coup to take control of Iran and place in power the American-backed Shah of Iran. The Shah expelled the British, and Rockefeller's Standard Oil now had control of the British-Persian petroleum fields.





     In 1954, Occidental Petroleum's Armand Hammer, a satrap of the Rockefellers, negotiated a deal with Russian dictator Joseph Stalin to buy his oil--thus effectively stealing it from the Russian people. Russian oil was then sold on the world market at a much higher price than Stalin could get by marketing it himself, because few countries were willing to buy oil from Stalin.





      Occidental Petroleum and Russia built two large pipelines, from the Russian oil fields down along both sides of the Caspian Sea, terminating in the old British-Persian--now Standard Oil--oil fields in Iran.

For the next 45 years, Russia secretly sent its oil out through those pipelines and Standard Oil sold the oil on the world market at the "West Texas Crude" price by calling it Iranian oil. For almost fifty yeas most Americans have been using Russian oil in their cars.





     Standard Oil refineries, which produce gasoline from crude oil, are located at large sea ports like San Francisco, Houston or Los Angeles, not near any of the large American oil fields. Most oil from the Persian Gulf is shipped in oil tankers to those large American refinery-ports.









     In 1979, the Standard Oil-backed Shah of Iran was thrown out by a British-backed coup and the long-time British asset, Ayatollah Khomeni, put into power. The flow of Russian oil through Iran suddenly stopped. Other oil pipelines were constructed through Iraq and Turkey. The Russian oil was now called OPEC Arabian-Middle Eastern oil and marketed at the even higher "spot market" price. So in 1979, in America and Europe, we suddenly experienced gasoline shortages and huge increases in the price of gasoline. Also in 1979 Standard Oil-Russian oil interests tried to secure an alternate, short, safe oil pipeline route from Russia through neighboring Afghanistan, but this only resulted in a prolonged war and the project was abandoned.









     When the new British-controlled regime in Iran came into power, the Rockefeller-influenced U.S. government immediately threatened to seize $7.9 billion of Iranian assets located in the U.S. On November 4, 1979 Iranian "terrorists" captured and held hostage 65 Americans. Essentially, Standard Oil was being blackmailed by the hostage strategy. After lengthy negotiations, the Rockefeller-created President Jimmy Carter approved the electronic transfer of 7.9 billion dollars from U.S. accounts to the Iranian regime on January 20, 1981.





     On Wednesday January 27, 1988, as announced in the Wall Street Journal, Standard Oil merged with British Petroleum. This actually represents Standard Oil's buyout of British Petroleum, the name of the newly merged company being BP-America. The Wall Street Journal did not see fit to mention worries about the world-wide predatory marketing practices of a deceptively titled Standard Oil regime.





     During the last 13 years, BP-America has merged with, or controls, all of the old Standard Oil "mini-companies" which existed before the original breakup by the U.S. government in 1911. The new Standard Oil regime is now known as BP-AMOCO, and few people in the world realize what has happened. It's now possible to understand why British Prime Minister Blair has become the spokesman for the new wars against terrorism (actually the war for Caspian Sea oil).









     At the end of WWII, General Douglas MacArthur became the military Governor of Japan. MacArthur's assistant was Laurence Rockefeller, one of John D. Rockefeller's four grandsons. As the second world war was drawing to a close, the U.S. was preparing for a massive invasion of the Japanese home islands.





     The military had stockpiled vast supplies of weapons and munitions on the island of Okinawa. Some sources claim that with Vice-governor Laurence Rockefeller's assistance most of the armaments were sold to the leader of Vietnam, Ho Chi Minh, for something like one U.S. dollar and Ho’s "goodwill." One might wonder why these expensive and critical military supplies were "given" to the North Vietnamese.









     To answer that question we have to go to an almost unknown study in the 1920's prepared by a man named Herbert Hoover, later to become President of the United States. The study showed that one of the world's largest oil fields ran along the coast of the South China Sea right off French Indo-China, now

known as Vietnam. This was before offshore drilling had been invented and before a man named George Herbert Walker Bush was to become the CEO of a world-wide offshore drilling company.











     In 1945, Vietnam was still a colony of the French. Laurence Rockefeller, it appears, had given the extensive store of weapons to Ho Chi Minh with the hope that Vietnam would drive out the French so that Standard Oil would be able to take over the as yet undeveloped offshore fields. But in 1954, Vietnamese General Giap finally defeated and drove out the French at Dien Bien Phu with weaponry provided by the U.S. Ho Chi Minh reneged on the deal since he could read too, and he was well aware of the Hoover resource report and knew there was a vast supply of oil off the Vietnamese coast.




     "In the 1950's a method of undersea oil exploration was perfected which used small explosions deep in the water and then recorded the sound echoes bouncing off the various

layers of rock below. The surveyor could then determine the exact location of the arched

salt domes which hold the accumulated oil beneath them. But if this method were used

off the Vietnam coast on property Standard didn't own or have the rights to, the

Vietnamese, the Chinese, the Japanese and probably even the French would quickly run

to the United Nations and complain that America was stealing the oil, and that would

shut down the operation.









"In 1964, after Vietnam was divided into North and South, and the contrived Gulf of

Tonkin incident, several U.S. aircraft carriers were stationed offshore of Vietnam and

the 'war' was started. Every day jet planes would take off from the carriers, bomb

locations in North and South Vietnam, and then using normal military procedure when

returning would dump their unsafe or unused bombs in the ocean before landing back on

the carriers. Safe ordnance drop zones were designated for this purpose away from the

carriers.





"Even close-up observers would only notice many small explosions occurring daily in

the waters of the South China Sea and thought it was only part of the 'war.' The U.S.

Navy carriers had begun Operation Linebacker One, and Standard Oil had begun its ten

year oil survey of the seabed off of Vietnam. And the Vietnamese, Chinese and

everybody else around, including the Americans, were none the wiser. The oil survey

hardly cost Standard Oil a nickel, the U.S. taxpayers paid for it."



Marshall Douglas Smith. (2001). Black Gold Hot Gold, Ch. 3









     So twenty years later and 57,000 Americans and half a million Vietnamese dead, Standard Oil had enough data and the war in Vietnam could end. Nelson Rockefeller's personal assistant, Henry Kissinger, represented the U.S. at the Vietnam/Paris Peace talks and won a Nobel Peace Prize in the bargain.





     After the dust had settled from the war, Vietnam divided their offshore coastal area into numerous oil lots and allowed foreign companies to bid on the lots, with the proviso that Vietnam got a percentage of the action. Norway's Statoil, British Petroleum, Royal Dutch Shell, Russia, Germany and Australia all won bids and began drilling within their areas. Strange it was that none of them struck oil. However, the lots which Standard Oil bid for and won proved to have vast oil reserves. Their extensive undersea seismic research appears to have paid off.







     Unfortunately, Big Oil's greed has not abated a whit.The American and British rulers have a new imperialistic strategy by which they hope to gain total control of the world's energy supplies. First, they sell armaments to a regime (for example, Panama, Iraq, Yugoslavia/Kosovo, Afghan/Pakistan/Taliban Mujaheddin, Saudi Arabia). Then, they demonize the regime to which they sold the armaments and declare war on it (e.g. Panama Invasion, Gulf War, UN Kosovo war, current Afghanistan war). After the war, they station permanent military bases in the country and use the military bases to control the energy resources in the surrounding countries. Current U.S. foreign policy is governed by the doctrine of "full-spectrum dominance": the U.S. must control military, economic and political developments everywhere.








"If you want to rule the world, you need to control oil. All the
oil. Anywhere."





Monopoly, by Michel Collon












     This new strategy began with the Panama invasion, next created the so-called Gulf War, continued with the UN-sanctioned war in the Balkans, and now expands with the new wars against terrorism (Afghanistan, the Philippines, and beyond). On January 20, 2001, Defense Secretary Donald Rumsfeld said that he was willing to deploy U.S. military forces in "another 15 countries" if that is what it takes to combat terrorism. The reason the so-called "war against terrorism" began in Afghanistan is because it is critical to the U.S.-British rulers' plans to control the Caspian Sea area oil and gas.





     The UN-sanctioned war in the Balkans was all about oil and the pipeline easement for Caspian Sea oil to Western European markets through Kosovo to the Mediterranean Sea. When Yugoslavia refused to play ball with the International Monetary Fund, the U.S. and Germany began a systematic campaign of destabilization, even using some of the veterans of Afghanistan in that "war." Yugoslavia was broken up into compliant statelets, and the former Soviet Union was contained. The outcome: the de facto U.S. occupation of Kosovo--where America built its largest military base since the Vietnam War









     The Caspian Sea area has proven oil reserves of fifteen to twenty-eight billion barrels plus estimated reserves of 40-178 billion, a total of 206 billion barrels--16 percent of the earth's potential oil reserves (compared to Saudi's 261 billion barrels of oil and America's own 22 billion barrels). Even at today's low prices, that could add up to $3 trillion in oil. With the Saudi regime tottering--an aging king about to die, widespread internal corruption creating calls for revolutionary overthrow--and a new source of oil and gas in the Caucasus, the Standard Oil suzerainty is looking to create a new regime in Saudi Arabia and develop a new center of operations in Southern Asia.





     The huge oil and gas reserves in the Caspian Sea must either be moved west to European markets or south to Asian markets. The western route is to move oil from Chechnya, across the Black Sea and through the Bosporus to the Mediterranean, but the narrow Bosporus channel is already clogged with oil tankers from the Black Sea oilfields. An alternate route would be to move the tankers from the Black Sea, bypassing the Bosporus, up the Danube River and then through a very short pipeline across Kosovo to the Mediterranean at Tirana, Albania. However, that process was stopped by the Chinese who have supplied and armed the Albanians, as a client state, since 1949.









     The other difficulty with the western route is that Western Europe is a tough market, characterized by

high prices for oil products, an aging population, and increasing competition from natural gas. Furthermore, the region is fiercely competitive, now being serviced by oil from the Middle East, the North Sea, Scandinavia, and Russia. Western Europe is not a very attractive market, because substantial infrastructure would have to be developed to bring that oil from the Caspian to an already overly-competitive European market.





     The only other ways to get Caspian Sea oil and gas to Asian markets is

through China, which is too long a route, or through Iran, which is politically and economically inimical to U.S.-Standard Oil objectives.









     As soon as the Soviets discovered the vast Caspian Sea oilfields in the late 1970's, they attempted to take control of Afghanistan to build a massive north-south pipeline system to allow the Soviets to send their oil directly through Afghanistan and Pakistan to the Indian Ocean seaport. The result was the decades long Soviet-Afghan war. The Standard Oil-influenced U.S. government saw the danger of a Russian north-south pipeline and the CIA trained and funded armed terrorist groups, including Osama bin Laden, who defeated the Soviets in the late 1980's.





     The Russians then tried to control the flow of oil and gas through its monopoly on pipelines. The Southern Asian Republics of the former Soviet Union--Turkmenistan, Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan--saw through this Russian monopolistic ploy and began to consult with Western companies.









     The Standard Oil-influenced U.S. government now plans to thrust further along the 40th parallel from the Balkans through these Southern Asian Republics of the former Soviet Union. The U.S. military has already set up a permanent operations base in Uzbekistan. The so-called anti-terrorist strategy is clearly designed to simultaneously consolidate control over Middle Eastern and South Asian oil, and contain and neutralize the former Soviet Union. With that strategy, Afghanistan is exactly where they need to be.





     Russia, realizing its weaker position vis-a-vis the United States, has been making noises as if it fully agreed with the U.S. incursions in Afghanistan. But Russia has joined the Shangahi Cooperation Organization (SCO) which includes China, Russia, Kazakhstan, Kyrgyzstan, Takijistan and Uzbekistan. China is using the SCO to try to align Russia economically and politically towards China and northeast Asia. Russia's membership in the SCO is an attempt to maintain its traditional hegemony in Central Asia. The underlying rationale of the SCO is the control of its members' enormous reserves of oil and gas.









     Despite the misgivings of Russia, China, India, or any other nation, Afghanistan will now become the base of operations in destabilizing, isolating, and establishing control over the South Asian Republics and the Middle-East. After the conquest of this area is complete and the permanent military posts are set up, they will begin construction of a pipeline through Turkmenistan, Afghanistan, and Pakistan to deliver petroleum to the Asian market.









     UNOCAL, the spearhead for Standard Oil interests, has been trying to build the north-south pipeline through Afghanistan and Pakistan to the Indian Ocean for several decades. In 1998, the California-based UNOCAL, which held 46.5 percent stakes in Central Asia Gas (CentGas), a consortium that planned an ambitious gas pipeline across Afghanistan, withdrew in frustration after several fruitless years. The pipeline was to stretch 1,271 km from Turkmenistan's Dauletabad fields to Multan in Pakistan at an estimated cost of $1.9 billion. An additional $600 million would have brought the pipeline to energy-hungry India.





     In the spring of 2001, Halliburton, Vice President Dick Cheney's company, signed a major contract with the State Oil Company of Azerbaijan to develop a 6000-square-meter marine base to support offshore oil construction in the Caspian Sea. The base will be used to assist Halliburton's catamaran crane vessel, the Qurban Abbasov, in upcoming offshore pipe-laying and subsea activities, according to a

statement the company released May 15, 2001.









     UNOCAL cut off its earlier agreement with the Taliban in 1998 when it became clear that the Taliban could not control all of Afghanistan and provide a stable political environment for a north-south pipeline construction project. It was likely at this juncture that a new "war against terrorism" ploy was conceived by the Standard Oil-influenced U.S. government. The "war against terrorism" in Afghanistan has come to a hiatus, with war-lords once again ruling the country, and the Bush administration has put their own man, Karzai, in power to control Afghanistan.









     Karzai was a top adviser to UNOCAL during the negotiations with the Taliban to construct a Central Asia Gas (CentGas) pipeline from Turkmenistan through western Afghanistan to Pakistan. Karzai is the leader of the southern Afghan Pashtun Durrani tribe. A member of the mujaheddin that fought the Soviets during the 1980s, Karzai was a top contact for the CIA, maintaining close relations with CIA Director William Casey, Vice President George Bush, and their Pakistani Inter Service Intelligence (ISI) Service go-between. After the Soviet Union left Afghanistan, the CIA sponsored the relocation of Karzai and a number of his brothers to the U.S.





     The real motives for the Bush administration's war in Afghanistan are clear for all to see. The U.S. Ambassador to Pakistan, Wendy Chamberlain, met with Pakistan's oil minister, Usman Aminuddin, in January, 2002 to continue plans for the north-south pipeline, encouraging the construction of Pakistan's Arabian Sea oil terminus for the pipeline.





     President Bush says our military will continue its presence in Afghanistan, which means that while the U.N. forces serve as a paramilitary police force, U.S. soldiers will be guarding the construction of the north-south pipeline.









To assure that the pipeline project will proceed apace, the Afghani-American Zalmay Khalilzad, a previous member of the CentGas project, became President Bush's Special National Security Assistant. Khalilzad has recently been named presidential Special Envoy for Afghanistan. Khalilzad is a Pashtun and the son of a former government official under King Mohammed Zahir Shah. Along with

being a consultant to the RAND Corporation, he was a special liaison between UNOCAL and the Taliban government. Khalilzad also worked on various risk analyses for the project under the direction of National Security Advisor Condoleezza Rice, a former member of the board of Chevron.






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Saturday, December 17, 2011

History of Property Taxes in the United States

The Revolutionary War was made possible by the system of taxation already in place. That is, America was able to achieve its independence from Britain only by funding a militia with taxes collected from the colonists.



After the Boston Tea Party, Americans continued to argue about taxes for the next 220 years. Still to this day, Americans are concerned about taxes, in part because it means each and everyone of us is essentially working for the state or federal government 20-50% of the time. In addition, Americans do not like how tax revenues are appropriated, especially as it proves to be a funding mechanism for an ever growing empire.

Amplify’d from eh.net

History of Property Taxes in the United States


Posted Mon, 2010-02-01 17:21 by Anonymous

Glenn W. Fisher, Wichita State University (Emeritus)

Taxes based on ownership of property were used in ancient times, but the modern tax has roots in feudal obligations owned to British and European kings or landlords. In the fourteenth and fifteenth century, British tax assessors used ownership or occupancy of property to estimate a taxpayer’s ability to pay. In time the tax came to be regarded as a tax on the property itself (in rem). In the United Kingdom the tax developed into a system of “rates” based on the annual (rental) value of property.

The growth of the property tax in America was closely related to economic and political conditions on the frontier. In pre-commercial agricultural areas the property tax was a feasible source of local government revenue and equal taxation of wealth was consistent with the prevailing equalitarian ideology.

Taxation in the American Colonies

When the Revolutionary War began, the colonies had well-developed tax systems that made a war against the world’s leading military power thinkable. The tax structure varied from colony to colony, but five kinds of taxes were widely used. Capitation (poll) taxes were levied at a fixed rate on all adult males and sometimes on slaves. Property taxes were usually specific taxes levied at fixed rates on enumerated items, but sometimes items were taxed according to value. Faculty taxes were levied on the faculty or earning capacity of persons following certain trades or having certain skills. Tariffs (imposts) were levied on goods imported or exported and excises were levied on consumption goods, especially liquor.

During the war colonial tax rates increased several fold and taxation became a matter of heated debate and some violence. Settlers far from markets complained that taxing land on a per-acre basis was unfair and demanded that property taxation be based on value. In the southern colonies light land taxes and heavy poll taxes favored wealthy landowners. In some cases, changes in the tax system caused the wealthy to complain. In New York wealthy leaders saw the excess profits tax, which had been levied on war profits, as a dangerous example of “leveling tendencies.”  Owners of intangible property in New Jersey saw the tax on intangible property in a similar light.

By the end of the war, it was obvious that the concept of equality so eloquently stated in the Declaration of Independence had far-reaching implications. Wealthy leaders and ordinary men pondered the meaning of equality and asked its implications for taxation. The leaders often saw little connection among independence, political equality, and the tax system, but many ordinary men saw an opportunity to demand changes.

Constitutionalizing Uniformity in the Nineteenth Century

In 1796 seven of the fifteen states levied uniform capitation taxes. Twelve taxed some or all livestock. Land was taxed in a variety of ways, but only four states taxed the mass of property by valuation. No state constitution required that taxation be by value or required that rates on all kinds of property be uniform. In 1818, Illinois adopted the first uniformity clause. Missouri followed in 1820, and in 1834 Tennessee replaced a provision requiring that land be taxed at a uniform amount per acre with a provision that land be taxed according to its value (ad valorem). By the end of the century thirty-three states had included uniformity clauses in new constitutions or had amended old ones to include the requirement that all property be taxed equally by value. A number of other states enacted uniformity statutes requiring that all property be taxed. Table 1 summarizes this history.

The political appeal of uniformity was strong, especially in the new states west of the Appalachians. A uniform tax on all wealth, administered by locally elected officials appealed to frontier settlers many of whom strongly supported the Jacksonian ideas of equality, and distrusted both centralized government and professional administrators.

The general property tax applied to all wealth -- real and personal, tangible and intangible. It was administrated by elected local officials who were to determine the market value of the property, compute the tax rates necessary to raise the amount levied, compute taxes on each property, collect the tax, and remit the proceeds to the proper government. Because the tax was uniform and levied on all wealth, each taxpayer would pay for the government services he or she enjoyed in exact proportion to his wealth.

The tax and the administrative system were well adapted as a revenue source for the system of local government that grew up in the United States. Typically, the state divided itself into counties, which were given many responsibilities for administering state laws. Citizens were free to organize municipalities, school districts, and many kinds of special districts to perform additional functions. The result, especially in the states formed after the Revolution, was a large number of overlapping governments. Many were in rural areas with no business establishment. Sales or excise taxes would yield no revenue and income taxes were not feasible.

The property tax, especially the real estate tax, was ideally suited to such a situation. Real estate had a fixed location, it was visible, and its value was generally well known. Revenue could easily be allocated to the governmental unit in which the property was located.

Failure of the General Property Tax

By the beginning of the twentieth century, criticism of the uniform, universal (general) property tax was widespread. A leading student of taxation called the tax, as administered, one of the worst taxes ever used by a civilized nation (Seligman, 1905).

There are several reasons for the failure of the general property tax. Advocates of uniformity failed to deal with the problems resulting from differences between property as a legal term and wealth as an economic concept. In a simple rural economy wealth consists largely of real property and tangible personal property -- land, buildings, machinery and livestock. In such an economy, wealth and property are the same things and the ownership of property is closely correlated with income or ability to pay taxes.

In a modern commercial economy ownership and control of wealth is conferred by an ownership of rights that may be evidenced by a variety of financial and legal instruments such as stocks, bonds, notes, and mortgages. These rights may confer far less than fee simple (absolute) ownership and may be owned by millions of individuals residing all over the world. Local property tax administrators lack the legal authority, skills, and resources needed to assess and collect taxes on such complex systems of property ownership.

Another problem arose from the inability or unwillingness of elected local assessors to value their neighbor’s property at full value. An assessor who valued property well below its market value and changed values infrequently was much more popular and more apt to be reelected. Finally the increasing number of wage-earners and professional people who had substantial incomes but little property made property ownership a less suitable measure of ability to pay taxes.

Reformers, led by The National Tax Association which was founded in 1907, proposed that state income taxes be enacted and that intangible property and some kinds of tangible personal property be eliminated from the property tax base. They proposed that real property be assessed by professionally trained assessors. Some advocated the classified property tax in which different rates of assessment or taxation was applied to different classes of real property.

Despite its faults, however, the tax continued to provide revenue for one of the most elaborate systems of local government in the world. Local governments included counties, municipalities of several classes, towns or townships, and school districts. Special districts were organized to provide water, irrigation, drainage, roads, parks, libraries, fire protection, health services, gopher control, and scores of other services. In some states, especially in the Midwest and Great Plains, it was not uncommon to find that property was taxed by seven or eight different governments.

Overlapping governments caused little problem for real estate taxation. Each parcel of property was coded by taxing districts and the applicable taxes applied.

Reforming the Property Tax in the Twentieth Century

Efforts to reform the property tax varied from state to state, but usually included centralized assessment of railroad and utility property and exemption or classification of some forms of property. Typically intangibles such as mortgages were taxed at lower rates, but in several states tangible personal property and real estate were also classified. In 1910 Montana divided property into six classes. Assessment rates ranged from 100 percent of the net proceeds of mines to seven percent for money and credits. Minnesota’s 1913 law divided tangible property into four classes, each assessed at a different rate. Some states replaced the town or township assessors with county assessors, and many created state agencies to supervise and train local assessors. The National Association of Assessing Officers (later International Association of Assessing Officers) was organized in 1934 to develop better assessment methods and to train and certify assessors.

The depression years after 1929 resulted in widespread property tax delinquency and in several states taxpayers forcibly resisted the sale of tax delinquent property. State governments placed additional limits on property tax rates and several states exempted owner-occupied residence from taxation. These homestead exemptions were later criticized because they provided large amounts of relief to wealthy homeowners and disproportionally reduced the revenue of local governments whose property tax base was made up largely of residential property.

After World War II many states replaced the homestead exemption with state financed “circuit breakers” which benefited lower and middle income homeowners, older homeowners, and disabled persons. In many states renters were included by provisions that classified a portion of rental payments as property taxes. By 1991 thirty-five states had some form of circuit breakers (Advisory Commission on Intergovernmental Relations, 1992, 126-31).

Proponents of the general property tax believed that uniform and universal taxation of property would tend to limit taxes. Everybody would have to pay their share and the political game of taxing somebody else for one’s favorite program would be impossible. Perhaps there was some truth in this argument, but state legislatures soon began to impose additional limitations. Typically, the statutes authorizing local government to impose taxes for a particular purpose such as education, road building, or water systems, specified the rate, usually stated in mills, dollars per hundred or dollars per thousand of assessed value, that could be imposed for that purpose.

These limitations provided no overall limit on the taxes imposed on a particular property so state legislatures and state constitutions began to impose limits restricting the total rate or amount that could be imposed by a unit of local government. Often these were complicated to administer and had many unintended consequences. For example, limiting the tax that could be imposed by a particular kind of government sometime led to the creation of additional special districts.

During World War II, state and local taxes were stable or decreased as spending programs were cut back because of decreased needs or unavailability of building materials or other resources. This was reversed in the post-war years as governments expanded programs and took advantage of rising property value to increase tax collections. Assessment rose, tax rates rose, and the newspapers carried stories of homeowners forced to sell their homes because of rising taxes

California’s Tax Revolt

Within a few years the country was swept by a wave of tax protests, often called the Tax Revolt. Almost every state imposed some kind of limitation on the property tax, but the most widely publicized was Proposition 13, a constitutional amendment passed by popular vote in California in 1978. This proved to be the most successful attack on the property tax in American history. The amendment:

1.      limited property taxes to one percent of full cash value

2.      required property to be valued at its value on March 1, 1975 or on the date it changes hands or is constructed after that date.

3.      limited subsequent value adjustment in value to 2 percent per year or the rate of inflation, whichever is lesser.

4.      prohibited the imposition of sales or transaction taxes on the sale of real estate.

5.      required two-thirds vote in each house of the legislature to increase state taxes

      and a two-thirds vote of the electorate to increase or add new local taxes.

This amendment proved to be extremely difficult to administer. It resulted in hundreds of court cases, scores of new statutes, many attorney generals’ opinions and several additional amendments to the California constitution. One of the amendments permits property to be passed to heirs without triggering a new assessment.

In effect Proposition 13 replaced the property tax with a hybrid tax based on a property’s value in 1975 or the date it was last transferred to a non-family member. These values have been modified by annual adjustments that have been much less than the increase in the market value of the property. Thus it has favored the business or family that remains in the same building or residence for a long period of time.

Local government in California seems to have been weakened and there has been a great increase in fees, user charges, and business taxes. A variety of devices, including the formation of fee-financed special districts, have been utilized to provide services.

Although Proposition 13 was the most far-reaching and widely publicized attempt to limit property taxes, it is only one of many provisions that have attempted to limit the property tax. Some are general limitations on rates or amounts that may be levied. Others provide tax benefits to particular groups or are intended to promote economic development. Several other states adopted overall limitations or tax freezes modeled on Proposition 13 and in addition have adopted a large number of provisions to provide relief to particular classes of individuals or to serve as economic incentives. These include provisions favoring agricultural land, exemption or reduced taxation of owner-occupied homes, provisions benefiting the poor, veterans, disabled individuals, and the aged. Economic incentives incorporated in property tax laws include exemptions or lower rates on particular business or certain types of business, exemption of the property of newly established businesses, tax breaks in development zones, and earmarking of taxes for expenditure that benefit a particular business (enterprise zones).

The Property Tax Today

In many states assessment techniques have improved greatly. Computer assisted mass appraisal (CAMA) combines computer technology, statistical methods and valve theory to make possible reasonably accurate property assessments. Increases in state school aid, stemming in part from court decisions requiring equal school quality, have increased the pressure for statewide uniformity in assessment. Some states now use elaborate statistical procedures to measure the quality and equality of assessment from place to place in the state. Today, departures from uniformity come less from poor assessment than from provision in the property tax statutes.

The tax on a particular property may depend on who owns it, what it is used for, and when it last sold. To compute the tax the administrator may have to know the income, age, medical condition, and previous military service of the owner. Anomalies abound as taxpayers figure out ways to make the complicated system work in their favor. A few bales of hay harvested from a development site may qualify it as agricultural land and enterprise zones, which are intended to provide incentive for development in poverty-stricken areas, may contain industrial plants, but no people -- poverty stricken or otherwise.

The many special provision fuel the demand for other special provisions. As the base narrows, the tax rate rises and taxpayers become aware of the special benefits enjoyed by their neighbors or competitors. This may lead to demands for overall tax limitations or to the quest for additional exemptions and special provisions.

The Property Tax as a Revenue Source during the Twentieth Century

At the time of the 1902 Census of Government the property tax provided forty-five percent of the general revenue received by state governments from their own sources. (excluding grants from other governments). That percentage declined steadily, taking its most precipitous drop between 1922 and 1942 as states adopted sales and income taxes. Today property taxes are an insignificant source of state tax revenue. (See Table 2.)

The picture at the local level is very different. The property tax as a percentage of own-source general revenue rose from 1902 until 1932 when it provided 85.2 percent of local government own-source general revenue. Since that time there has been a significant gradual decline in the importance of local property taxes.

The decline in the revenue importance of the property tax is more dramatic when the increase in federal and state aid is considered. In fiscal year 1999, local governments received 228 billion in property tax revenue and 328 billion in aid from state and federal governments. If current trends continue, the property tax will decline in importance and states and the federal government will take over more local functions, or expand the system of grants to local governments. Either way, government will become more centralized.

Table 2

Property Taxes as a Percentage of Own-Source General Revenue, Selected Years

                                    ______________________________
                                    Year                 State                Local
                                    ______________________________           
                                    1902                45.3                 78.2
                                    1913                38.9                 77.4
                                    1922                30.9                 83.9
                                    1932                15.2                 85.2
                                    1942                  6.2                 80.8
                                    1952                  3.4                 71.0
                                    1962                  2.7                 69.0
                                    1972                  1.8                 63.5
                                    1982                  1.5                 48.0
                                    1992                  1.7                 48.1
                                    ­­1999                  1.8                 44.6
                                    _______________________________

Source: U. S. Census of Governments, Historical Statistics of State and Local Finance, 1902-1953; U. S. Census of Governments, Governments Finances for (various years); and http://www.census.gov.

References

Adams, Henry Carter. Taxation in the United States, 1789-1816. New York: Burt Franklin, 1970, originally published in 1884.

Advisory Commission on Intergovernmental Relations. Significant Features of Fiscal Federalism, Volume 1, 1992.

Becker, Robert A. Revolution, Reform and the Politics of American Taxation. Baton Rouge: Louisiana State University Press, 1980.

Ely, Richard T. Taxation in the American States and Cities. New York: T. Y. Crowell & Co, 1888.

Fisher, Glenn W. The Worst Tax? A History of the Property Tax in America. Lawrence: University Press of Kansas, 1996.

Fisher, Glenn W. “The General Property Tax in the Nineteenth Century: The Search for Equality.” Property Tax Journal 6, no. 2 ((1987): 99-117.

Jensen, Jens Peter. Property Taxation in the United States. Chicago: University of Chicago Press, 1931.

Seligman, E. R. A. Essays in Taxation. New York: Macmillan Company, 1905, originally published in 1895.

Stocker, Frederick, editor. Proposition 13: A Ten-Year Retrospective. Cambridge, Massachusetts: Lincoln Institute of Land Policy, 1991.

Citation: Fisher, Glenn. "History of Property Taxes in the United States". EH.Net Encyclopedia, edited by Robert Whaples. September 30, 2002. URL http://eh.net/encyclopedia/article/fisher.property.tax.history.us


                                    ­­1999                  1.8                 44.6
                                    _______________________________


Source: U. S. Census of Governments, Historical Statistics of State and Local Finance, 1902-1953; U. S. Census of Governments, Governments Finances for (various years); and http://www.census.gov.


References


Adams, Henry Carter. Taxation in the United States, 1789-1816. New York: Burt Franklin, 1970, originally published in 1884.


Advisory Commission on Intergovernmental Relations. Significant Features of Fiscal Federalism, Volume 1, 1992.


Becker, Robert A. Revolution, Reform and the Politics of American Taxation. Baton Rouge: Louisiana State University Press, 1980.


Ely, Richard T. Taxation in the American States and Cities. New York: T. Y. Crowell & Co, 1888.


Fisher, Glenn W. The Worst Tax? A History of the Property Tax in America. Lawrence: University Press of Kansas, 1996.


Fisher, Glenn W. “The General Property Tax in the Nineteenth Century: The Search for Equality.” Property Tax Journal 6, no. 2 ((1987): 99-117.


Jensen, Jens Peter. Property Taxation in the United States. Chicago: University of Chicago Press, 1931.


Seligman, E. R. A. Essays in Taxation. New York: Macmillan Company, 1905, originally published in 1895.


Stocker, Frederick, editor. Proposition 13: A Ten-Year Retrospective. Cambridge, Massachusetts: Lincoln Institute of Land Policy, 1991.


Citation: Fisher, Glenn. "History of Property Taxes in the United States". EH.Net Encyclopedia, edited by Robert Whaples. September 30, 2002. URL http://eh.net/encyclopedia/article/fisher.property.tax.history.us




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Friday, December 16, 2011

Global USD Ponzi Scheme Exposed

What value is the USD to an average citizen if the Federal Reserve can "lend" freely printed money to all other central banks and private banks around the world in secrecy in order to prop them up? What good does it do for us to evaluate the creditworthiness of these institutions and their debt instruments if a privileged few can magically inflate their bank accounts with Fed money long enough for them to complete an audit or produce financial statements.



Combine this with the off balance sheet Enron style accounts and entities and you can see that these banking corporations are nothing more than larger versions of the Madoff enterprise.



Add to that the ability of trading companies and investment brokerages to borrow and gamble with your money as collateral (a process known as rehypothicatation) and not be held responsible when the music stops.



What is the true risk associated with the stocks and bonds of banks, investment brokerages, etc if they are all indeed running a ponzi scheme?



What is the point of having regulatory institutions like the CFTC, CFE, SEC, and FED is they are going to turn a blind eye to the risk and corruption?



And last but not least, what is the point of electing politicians to write laws if they are going to be bought by the highest bidder anyways? Democracy for Sale.



The global markets are overrun by cancerous and twisted politics and twisted economics.



It's time to rethink economics. It's time to rethink politics.

Amplify’d from www.alternet.org

Bail-out Bombshell: Fed "Emergency" Bank Rescue Totaled $29 Trillion Over Three Years



By J. Andrew Felkerson, AlterNet

Posted on December 15, 2011, Printed on December 16, 2011

http://www.alternet.org/story/153462/bail-out_bombshell%3A_fed_%22emergency%22_bank_rescue_totaled_%2429_trillion_over_three_years

Speculation about the the Fed’s actions during the financial crisis has made headlines on and off again over the last several years.  The latest drama occurred on November 27 when Bloomberg published an article, “Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress," which gives an account of the news agency’s struggle to bring to light the details of the Fed’s emergency programs. Bloomberg throws out some very large numbers, revealing that as of March 2009, the Fed lent, spent, or committed $7.77 trillion worth of aid to the financial system and that banks used the low interest rates charged on these loans to make an estimated $13 billion in income. 


On December 6, the Fed struck back, issuing a four page unsigned memo intended to correct recent “egregious errors and mistakes” found in various reports of its emergency lending facilities.  The Fed argues that the “total credit outstanding under liquidity programs was never more than about $1.5 trillion.”  While Bloomberg wasn’t mentioned explicitly in the Fed memo, it was fairly clear to whom the response was directed.  The following day Bloomberg defended its reporting, and the Wall Street Journal’s David Wessel came to the Fed’s defense, characterizing Bloomberg’s methodology as a “great story,” but ultimately not “true.”



All this may sound like controversy, but it’s little more than a tempest in a teacup.


Here’s the hurricane: In reality, no less than $29.616 trillion is the total emergency assistance provided by the Fed to foreign and domestic entities during the Global Financial Crisis. Let’s repeat that: $29 trillion. This astounding number is over twice U.S. gross domestic product, the nominal value of all goods and services produced for the year 2010.  This is the total of the bailout as calculated by Nicola Matthews and myself as part of the Ford Foundation project, A Research And Policy Dialogue Project On Improving Governance Of The Government Safety Net In Financial Crisis.  We will be presenting the results of our analysis in a series of papers published by the Levy Economics Institute, the first of which, “29,000,000,000,000: A Detailed Look at the Fed’s Bailout by Funding Facility and Recipient,” is already available here.



The results we have calculated are presented below, and it is important to note that the totals are cumulative and in billions of U.S. dollars. (The numbers in parentheses indicate amounts still outstanding as of November 10, 2011).
































































































Facility Total Percent of Total
Term Auction Facility $3,818.41 12.89%
Central Bank Liquidity Swaps 10,057.4 (1.96) 33.96
Single Tranche Open Market Operations 855 2.89
Term Securities Lending Facility and Term Options Program 2,005.7 6.77
Bear Stearns Bridge Loan 12.9 0.04
Maiden Lane I 28.82 (12.98) 0.10
Primary Dealer Credit Facility 8,950.99 30.22
Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility 217.45 0.73
Commercial Paper Funding Facility 737.07 2.49
Term Asset-Backed Securities Loan Facility 71.09 (10.57) 0.24
Agency Mortgage-Backed Security Purchase Program 1,850.14 (849.26) 6.25
AIG Revolving Credit Facility 140.316 0.47
AIG Securities Borrowing Facility 802.316 2.71
Maiden Lane II 19.5 (9.33) 0.07
Maiden Lane III 24.3 (18.15) 0.08
AIA/ ALICO (AIG) 25 0.08
Totals $29,616.4 100.0%


 


I want to be clear. These are the totals of Fed lending and asset purchases actually undertaken since the bail-out began. There is no double-counting. And we do not include any credit facilities created by the Fed unless they were actually used. These figures accurately reflect the cumulative totals over the approximately three years actually used by the Fed to prop-up domestic and international banks, shadow banks, central banks, and even some non-financial institutions.


Banks in the Shadows



The programs above constitute the crisis prevention machinery rolled out by the Fed to combat the worst financial panic since 1929. All the programs above were designed and implemented to target domestic financial and nonfinancial corporations or foreign central banks or markets, or both. Only one of the facilities, the Term Auction Facility, can be viewed as being consistent with the Fed’s mandate to protect the commercial banking system from systemic failure. The rest are the result of the increasing relevance of the “shadow banking” to our economy—and of the Fed’s attempt to rescue the shadow banking sector.



Shadow banks are highly leveraged financial institutions that perform functions historically relegated to the commercial banking system. It is important to note that these financial concerns do not have access to the conventional means of Fed support. Nor were they ever really regulated or supervised by the Fed. They engaged in extremely risky behavior that in large part led to the global financial crisis. And when it hit, the Fed spent and lent $29 trillion, much of it devoted to rescuing the shadow banking system.



Thus, we see a host of unconventional programs designed to aid these institutions rather than the Fed’s traditional patrons. The information used to calculate the totals above is freely available (thanks in large part to the valiant efforts of a group of lawmakers led by Senator Bernie Sanders) as the result of an amendment inserted into the Dodd Frank bill. Moreover, this information has been freely available since December 10, 2010 on the Fed’s website.



So why didn’t someone else already put the data together in this way?



The Fed's Secrets



Obviously, $29 trillion is much bigger than the previous estimates of $7.77 trillion (Bloomberg) or $1.5 trillion (the Fed and the Wall Street Journal). An in-depth account of each of the facilities above is a rather lengthy process as the Levy working paper attests. The main difference in our analysis is the variables we identify as essential in understanding the Fed’s response. In our paper we report three measures that we view as critical to capturing the size and magnitude of the bailout. Each of the three measures deals exclusively with programs put into place by the Fed that transcend its conventional "lender of last resort" (LOLR) function. That is, we only include the emergency facilities the Fed created. We agree with the Fed that only facilities which were actually made operational should be considered in any account of the Fed’s actions. But we take the side of Bloomberg regarding the general lack of transparency by the Fed—the Fed fought tooth and nail to keep the details of its programs secret.



At any given moment inspection of the amount owed to the Fed resulting from nonconventional lender of last resort actions provides a reasonable account of what the Fed was doing in the period leading up to that time. However, looking at this number over time and in the context of the weekly amount lent provides insight into how the Fed’s efforts evolved over the run of the crisis. These two approaches to measurement (a “stock” or outstanding balance and a “flow” or cumulated amount spent and lent weekly) only provide us with details regarding the scope of the Fed’s bailout. To get a clear picture we need some account of the magnitude. We believe that this is captured by looking at the cumulative totals of all programs.



Perhaps the largest difference in our analysis is that we learned our money and banking theory from the late Hyman Minsky. He taught us that the modern economy is essentially financial, and as such, is prone to systemic financial crises that if left unchecked can lead to “bone crunching depressions.” Therefore it is essential to have a LOLR. Thus, any transaction between the Fed and the markets which is not part of conventional monetary operations, such as lending from the discount window or open market operations, represents an instance in which private markets were not able to or were unwilling to engage in the normal financial intermediation process. If it any point in time the private markets were capable (or willing) to carry out business as usual, Fed intervention would not have been required. Thus, we need to account for each extraordinary event, and the best way that we know to do this is by summing each instance--which results in a cumulative total of over $29 trillion dollars.



Who does the Fed serve?



A figure as large as $29.616 trillion should not be taken lightly, but focus on the specific magnitude of the figure diverts our attention from a larger issue that is at stake: how should the LOLR responsibility to be discharged in the future? With unemployment remaining persistently high and millions continuing to lose their homes to foreclosure as the result of lost income from a poor economy or outright fraud in the mortgage lending and foreclosure process, it becomes increasingly difficult to justify the ability of a single institution staffed by unelected officials to carry out such a targeted commitment of the obligations of the United States citizenry. Thanks to the actions of Senator Sanders and other individuals possessing the temerity to question the authority of the Fed we now have access to much of the data regarding what the Fed did during the recent crisis.



But we still need to go through the data from the past three years of bail-outs to answer the following questions: Who got funds from the Fed? How much did they get? And why did they get them? The Fed has not adequately explained why its emergency lending and asset purchases went on for so long and accumulated to such a large number.





 


 




J. Andrew Felkerson is a Interdisciplinary PhD student at the University of Missouri- Kansas City

Read more at www.alternet.org