The History of the Decline and Fall of the American Hegemony—Chapter 6 Excerpt—Framework Failure
Gregg Zegarelli Esq.
Managing Shareholder at Technology & Entrepreneurial Ventures Law Group, PC
Following is a Chapter 6 excerpt from the Complete Article, as the Complete Article is cited as a 40+ minute read. This excerpt is edited, updated, and has differences from the chapter as first published. This excerpt contemplates reference to the Complete Article to be understood as presented.
Chapter 6. The Destroyed Economic Framework: Destruction of the Middle Class, Destruction of Self-Responsibility, and Destruction of Proper Incentive by Systemic Transfers of Wealth. ?
1. First, the American Middle Class is not a natural construct. [60]
The American Middle Class is a necessary contrivance of social manipulation, and the Tax Code, such as it is, proves it.
The rich will get richer, and the poor will get poorer—as the strong will naturally use selfish advantage—except as artificially constrained by law. "If men were angels," says Founding Father James Madison, we would not need laws in the first place. [*1 , 61]
Such as it is for sustaining the NFL and its prosperity, and the necessity of anti-trust laws and other legal constraints in America, managed laws keep the game strong, by governing with contrived incentives, punishments, and limits.
When wealthy friends ask rhetorically, "Who should say in America how much money a person can make?" The answer is, "America, it's that simple."
Certainly, "a workman is worthy of his meat" [24.9] , but we should be sufficiently educated to perceive the rhetoric of ideals cleverly used to defeat common sense real-world implementation. But self-interested Wall Street short-term profit and the media has everyone angry and confused and not really knowing why, because the betrayal is under the sweet guise of a kiss. [24.10]
No ideal of freedom is unfettered in practice. The utopian abstract ideal of America may suggest no limitations laissez-faire, but the robber barons and the 1929 Stock Market Crash [and NFL salary caps and NFL draft rotation ] prove human tendencies in a capitalistic framework, requiring American Middle Class management as a necessary economic and systemic contrivance to keep the game of America dynamic and sustained.
Without legal constraint, the tendency is to the few in oligarchy , making all the money in plutocracy , getting all the education in aristocracy . The systemic framework of prioritizing man over a tree is not the same thing as prioritizing one man over another. Wisdom loves a man as a man, a dog as a dog, and a tree as a tree, often conflated by children and by those not properly educated.
Indeed, the entire United States Tax Code is essentially a form of wealth redistribution. [61] Every time there is a granted fringe benefit, or an allowed deduction or exemption, it is effectively wealth redistribution. Money moves from here to there, for the good of America's sustainability. Every time there is a government contract to buy or to build the American infrastructure, wealth moves systemically from someone to someone else. Towering wealth stands on the shoulders of American People and the American eco-system.
Let us not be outwitted by the educated wealthy Wall Street selfish rhetorical narrative. Rather, let us perceive that every economic system from the beginning of time is inherently a social construct among people—as is capitalism—and each construct requires discipline and control to sustain itself by a methodology of its existential principles.
A dog on a leash does not make it a cat.
The issue is not simply wealth redistribution, per se, but, rather, the issue is where the wealth is going and why, and how does that transfer serve the primary objective of a prosperous and sustained American People, which tends to be a function of a healthy American Middle Class. [*60] Every wise shopper prioritizes on value, rather than being "penny wise and pound foolish." [62] And it should be no less with tax expenditures; it's not about what is spent, but about the value received. A fool does not know how to spend, no matter how much money is placed into his hands.
Allocating to consumption without seeding systemic production and industry, sold to foreign countries by Wall Street, tends to be folly feeding upon folly.
Res ipsa loquitur says the law—the thing speaks for itself.
American survival on inflated vapor money and national debt proves Wall Street financier folly by admission. It's a short-term profit for Wall Street that works only for a limited time.
If Wall Street really knew what it was doing, America would be financially healthy, but, alas, America is gravely financially unhealthy.
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Statistics indicate that the rich are getting richer. Says Motley Fool, "The latest edition of Oxfam's annual Inequality Inc. report is out, and it states: 'Since 2020, the richest five men in the world have doubled their fortunes. During the same period, almost five billion people globally have become poorer.'" [63]
"No man is an island," says John Donne .
Indeed, in America, systemic prosperity is by a product of social influences, and systemic rewards and punishments. The transfer of wealth is bound to a systemic privilege only to the extent that the rule serves the objective. "If your right?hand?causes?you to sin, cut?it off?and throw?it away,” says Jesus. [24.11] The member serves sustenance of the body and the body's objective standing united as a holistic undivided entity. But, as said, the tax must seed production, as men must not be given the fish, but taught how to fish.
If Elon Musk or Jeff Bezos formed a corporation to achieve wealth, or implemented use of Wall Street, or enjoyed the write-offs of the Tax Code, then he is not self-made, but only standing on the shoulders of Americans. ?If a multi-millionaire cannot be happy as such, being increasingly taxed from surplus, the problem is not with the tax, but with the man.
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2. Second, the "corporation" is not a natural construct.
The systemic capitalist business engine of America revolves around artificial contrived creatures of law; that is, the "corporation" (and similar entities). [64]
The corporation, such as America inherited it, is derived from England, where it was matched to the risk of debtor's prison . The investors in enterprise consisted of sending ships (no GPS in those days) into vast bodies of water with the risk of Mother Nature's unpredictable storm sinking the ship. That is, the investor was subject to the uncontrollable accidents of the weather. If the ship sank in debt, the bankrupt investor would be put into debtor's prison until the debt was paid, which was difficult to pay then being in prison.
Therefore, only for the exceptive and socially-beneficial specific purpose, the Crown effectively granted advance economic dispensation by limiting liability for the social good of the realm and for the common weal.
The granted corporation charter was the exception, not the general rule. The general rule was that the entrepreneur was liable for his choices. Indeed, the poor foolish cobbler who purchased too much leather or bad glue would go to debtors' prison by rule. The general rule of business was self-responsibility.
Early in American legal evolution, corporation laws generally required a purpose to be stated in the corporate charter for approval by the state in order to receive the benefit of limited liability to socialize the entrepreneurial risk.
The purpose statement became a formalism, no longer required, now with the implicit default being any lawful purpose. But, we note that any lawful purpose is not necessarily a socially meaningful purpose. Every corporate purpose is now equal for the benefit of limited liability that socializes entrepreneurial risk. Thus, society now endures the downside risk of every entrepreneurial venture.
Now, having created countless creatures over 35 years, I do not wish to debate who is to judge corporate purpose in a free-thinking society. The point is simply to expose the grave descension of essence in law from the good purpose by the exception, to any purpose by the general rule.
There are now so many ways to escape financial liability for business choices, thereby socializing the downside risk, that only a foolish or poor entrepreneur is not exempt from liability for decisions. General society now is now burdened with the essential pervasive downside risk of every entrepreneurial gamble within the cost of living. The common weal is made immaterial.
By artificial construct, society now bears directly the downside risk for a corporate failure, but society does not share directly the concomitant upside as such for a corporate success. That is, society and not the entrepreneur is charged to pay for failure. Indeed, corporate profit rewards run directly to the private selfish interest, but the downside risk runs over to the common debt.
In a capitalist economy, the point is not to eliminate a private financial gain for the capitalist—which is the incentive—but rather to expose the unfair shift of the downside risk by artificial socialized legal construct. That is, only the downside risk is socialized, but not the upside. The benefit and burden are no longer matched, nor is the purpose reviewed to serve the common weal.
Moreover, there is now bankruptcy protection instead of debtor's prison. This may be an advancement in civility in some regards. However, if we take the systemic limit of liability by the safety net of the corporation, and, for any remaining liability, the safety net of bankruptcy protection, there is a socialistic tendency in effect, which was never the original intention of the legal construct.
The creatures evolved thusly only by the experiments of doctors of law; that is, lawyers. It started as a capitalist creature in causation evolving in increments into a socialistic creature in effect. The corporation is no longer a privilege of entrepreneurship only for uncontrollable risks, but is now a construct of socialized risk without systemic social or economic responsibility.
There are now corporations, limited liability companies, limited partnerships, and so many other business enterprises, and so many taxation structures, that the law should merely ask with a checkbox: "Do you want to be liable or not, and do you want to pay more or less tax." Since everyone will answer the questions the same way in self-interest, the law should merely make no one liable or to pay more tax, but, as it is, only the stupid and poor do not implement the available contrivance legal constructs, which is systemically unfair.
Moreover, this man-made artificial contrivance creature corporation—being a piece of paper ministerially filed with a state—is now evolved by legal precedent to be a legal person in the same manner of a human being, but it's not human.
"Confusion hath made his masterpiece," said Shakespeare, and likewise the results of Citizens United , the 5-4 Supreme Court decision treating corporations like human beings, being a foolish wonkish tail-wagging-the-dog view of the corporation and the American economic eco-system. [*64]
Creature corporations now make the master into their slave. [*64] So said dissenting Justice John Paul Stevens, arguing that the court's ruling represented "a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self government." [65]
A corporation does not eat, it does not sleep, and it does not feel pain. Mother Nature did not create it, and it has no natural rights. [66 , *64] The creature will either serve America, its master, or it is a monster, a rogue that cannot be imprisoned and now holding the whip of legal precedent.
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3. The system of death and gift taxes overtly favors the rich, and the common man does not understand the concept well enough to contest it.
Third and finally, another reason that the rich are getting richer and the poor are getting poorer in America is because the wealth transfer taxation system favors the monetarily free transfer of wealth, which is an incident of royalty.
This has disproportionate social benefit in effect. [66] The personal satisfaction of the gift may be equal, but the associative tax benefit is not; to wit, says Bing AI:
In 2024, the annual gift tax exclusion allows individuals to give away up to $18,000 to as many people as they wish without incurring any gift tax. This means you can generously gift up to that amount to your loved ones without worrying about tax implications. If you’re married, the combined limit for you and your spouse is $36,000. So go ahead and spread some financial cheer!
[67] And some people are indeed cheerful for this rule. That's the abstract rule, but consider the real-world implementation as a matter of statistics.
How many of the increasingly poorer people, who are strapped in debt, and surviving only with inflated vapor dollars, paying the pro rata share of national debt of $34T, being bailed out by failed Wall Street policy, are actually spreading all around unlimited cheerful gifts of $18K per person or $36K per couple, per year? The Wall Street rich, made so as an artificial construct of taxation by the American eco-system.
Says Bing AI regarding, for example, Disney's Bob Iger's annual compensation (emphasis added) for 2024 :
According to a filing with [SEC], Iger will receive a compensation package valued at $27 million each of the 2 years—though the actual number could be higher or lower, depending on the company’s performance and stock price.
Stop and take note of the Wall Street annual (that is, in one year) stock price incentives in decision-making. This is correlated to why Wall Street executives sell American industry into foreign slavery for profit.
Iger's one-man $27M per year—having no downside risk, but only risk of losing his upside—is the equivalent of 454 hard working debt-laden American human beings making the USA average of $59,384 .
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A lion is entitled to his meat, until he starves the pride.
Indeed, the annual payment into the pockets of one human being are so big, that it's hard to contemplate, so the conversation is diverted to the common man staple debate, minimum wage rather than the wealthy man maximum wage, although both are jointly implicated to sustain a healthy capitalist Middle Class economic game.
[And, we keep in mind that many CEOs at Iger's level have intersecting highly paid board of director positions on other brethren Wall Street public companies.] Money begets money as power begets power.
Wall Street corporation CEOs, like Iger, are certainly cheerful to give unlimited tax-free gifts to their own family, only because they have the money to implement the rule. Yes, the rule is the same for everyone, but it does not play out the same for everyone in the "real world":
They said the rule was mutual and thus it must be fair, sure as a hare may eat a lion, and a lion may eat a hare.
The transfer of money to an heir, a person who did not work a moment to earn it, and without tax. Luxury transferred to luxury. This is an incident of royalty, not capitalism. The rule is not equality in practice but only in theory. The brilliant wealthy narrative focuses everyone to idealistic equal theory, and away from unfair "real world" application.
The proverbial uneducated little old lady who is Wall Street media propagandized to love a tax free gift does not understand that her pittance of a saving is providing billions of savings for the rich. The education system did not teach her the subject, so she's a victim of the self-interested narrative.
The same principle applies to "stepped up basis ." [69 , 70] This tax-free "benefit" for eliminates taxable gain on appreciated property at death. Yes, eliminating the benefit would take away a tax benefit for everyone's heirs, but the monetary burden ratchets up for the wealthy.
When wealthy friends ask rhetorically, "I worked for this money. I paid my tax when I earned it. Who should say in America how much money I can leave tax free to my children?" The answer is, "America, it's that simple."
Let us not get confused by the brilliant wealthy educated self-interested Wall Street narrative.
The income tax on the working earner is a coordinated function of the gift tax on the non-working children estate beneficiaries, as well as a function of everything else in the voluminous Tax Code. The eco-system that giveth is the eco-system that can taketh away. That is the proper managed contrivance of maintaining the healthy American Middle Class capitalism that creates the bundle of rights, privileges appurtenant to, "I am a citizen of the United States of America."
The wealthy adore every artificial contrivance by which they acquire and preserve family wealth but speak only of detest for any contrivance by which they might lose it, playing it both ways. Smart but unfair, and the common man doesn't even know what's hitting him. He feels the effect of the pain, but he is uneducated to articulate the causation for it, wallowing in doom.
And, let's look at even one more tax privilege of kings, to the demise of the hard-working American Middle Class. In addition to wealth transfers of 1) unlimited tax-free $36K gifts for couples, and in addition to the 2) tax-free gains of stepped-up basis at death, we can pile on the 3) tax-free gifts $13,610,000, $13.61M, for individuals and $27,220,000, $27.22M for couples. [71 , 72] The only people who will say that $27M is not a vast amount of money are people with vast amounts of money.
The incredibly wealthy will brilliantly argue about the taxes they pay during life, but not about the unpaid taxes they don't pay at death.
And, such as it is, take further notice of that other pervasive paper contrivance known as the "trust," similarly to the "corporation." A "trust" is a paper artificial fictional contrivance legal construct that is implemented to avoid the very death and transfer taxation that the law has otherwise implemented.
Trusts are legal dysfunction. They are a creature of law that exists to avoid the very tax that the law created to serve the common weal. The law compels payment and then creates the route of escape. And I say this as an admitted accomplice before and after the fact, having formed countess trusts.
Trusts benefit the wealthy to achieve wealth transfers in the same manner as royalty, not by capitalistic incentive. The common man knows nothing of trusts, neither having the family money to give or the family money to take.
The government establishes a death tax, on the one hand, only to permit trusts to defy the tax, on the other hand. If we should really think about it, it's ironic socio-politico nonsense for the rich. But it has evolved to its tipping point.
Therefore, let us select the best answers; to wit:
Who should be taxed? The non-worker who is receiving a gift.
When should a worker be taxed? After death, of course.
Who should be incentivized not rely upon gifts and hand-outs? The heir who never worked for it.
Spend all you want during life, the tax comes later, since you can't take it with you, and your heirs didn't earn it. Death taxes should be the primary focus of tax policy, and it won't hurt a bit. Every wise shopper prioritizes on value, rather than being "penny wise and pound foolish." [*62] It's not about what is spent, but about the value received. The pittance buys the bucket.
Income and property are exactly what the artificial contrivance of law say they are, no more, no less. The rich complain about the poor worker getting handouts, but not their own children getting handouts.
The tax-free transfer of wealth tends to defeat the capitalist incentive to earn in the expecting beneficiary and it gives an unfair head start to the privileged children of the wealthy, unnaturally keeping the wealth in a family line, being an incident of royalty. This is not natural systemic capitalism.
There's a reason why tax policy is upside down. The wealthy know the game, and keep the poor Middle Class scurrying about diverted and bleary-eyed, thinking only about the now, minimum wage, the paycheck to paycheck.
The entire economic and commercial system in America is an artificial contrivance legal construct that is supposed to exist for the common weal. Such as it is, only stupid people and poor people don't form corporations and trusts to avoid the taxes and self-responsibility that exist for the common weal, which is systemic dysfunction.
Indeed, the system is overtly rigged for the rich who have created an evolved legal system that is frameworked to allow lawful escape from the very constraints of law that exist to serve the common weal. If the wealthiest NFL teams could avoid the salary cap and the draft rotation, the best would get better and the bad would get worse, until the game imploded. Such as it is for games with exceptions that swallow the rule.
America is chasing its tail in the political debate, because it is debating the lesser particular problems without addressing the greater systemic catastrophes.
There is no theory or practice other than all must yield to the primary objective of the common weal by American capitalism that is now only a shadow of self.
"'Since 2020, the richest five men in the world have doubled their fortunes. During the same period, almost five billion people globally have become poorer.'" [*63]
[20] https://www.zippia.com/advice/working-age-population ; https://usafacts.org/articles/what-is-the-us-national-debt-and-how-has-it-grown-over-time/?utm_source=bing&utm_medium=cpc&utm_campaign=ND-ElectionsGov&msclkid=902217b370f613d502bb7273af761b54 [$36,000,000,000,000, divided by 207,406,609 working age is $173,572 or at two third middle and upper class feeding the system debt of 136,888,362 $262,988]
[24] ONE?: The LinkedIn Reference Set [#GRZ_183] 24.1 ONE: 1022 [T11:19] ("Wisdom Vindicated By Works"); 24.2 ONE: 1325 [T15:14] ("Blind Lead Blind-Ditch"); 24.3 ONE: 296 [L4:23] ("Physician Heal Thyself"); 24.4 ONE: 1661 [T18:6, R9:42, L17:2] ("Millstone); 24.5 ONE: 1143 [T13:13, R4:12] ("Perceive"); 24.6 ONE: 1040: [L10:27] ("Love Neighbor As Self"); 24.7 ONE: 582 [T6:24] ("Serve Two Masters"); 24.8 ONE: 635 [T7:20, L6:44] ("Tree By Its Fruit"); 24.9 ONE: 921 [T10:10] ("Workman Worthy Meat"); 24.10 ONE: 2632 [T26:50, L22:48] ("Betray With A Kiss"); 24.11 ONE: 514 [T5:30, R9:43] ("Right Hand Cause to Sin"); 24.12 ONE: 577 [T6:21] ("Heart Treasure"); 24.13 ONE: 1661 [L10:33] ("You Are Gods"); 24.14 ONE 1747 [L17:20] ("Kingdom Within"); 24.15 ONE: 799 [T9:17, R2:22, L5:37] ("New Wineskins"); 24.16 ONE: 2121 [T22:20, R12:16, L20:24] ("Caesar Coin Tax"); 24.17 ONE: 373 [J2:25] ("Human Nature"); 24.18 ONE 2211 [T23:25, L11:39] ("Inside-Out Hypocrisy")
"Canis in lorum felem non facit." ("A dog on a leash does not make it a cat."); "Léo competit esum carnium, donec alii leones esuriant." ("The lion is entitled to his meat, until he starves the pride.") ~grz
A Farmer had a Goose that began to lay golden eggs.
Each day one new golden egg would be laid by the Goose, and the Farmer grew very rich.?However, the Farmer was impatient and tried to get the Goose to lay more than one golden egg each day.
In desperation for even more golden eggs, the Farmer cut the Goose open to get all of eggs at once!?And, when he cut the Goose open, he got only the death of his Goose, and no more golden eggs.
The statements or opinions made in this article are solely the author's own and not representative of any institution regarding which the author is affiliated.
* Gregg Zegarelli , Esq., earned both his Bachelor of Arts Degree and his Juris Doctorate from Duquesne University, Pittsburgh, Pennsylvania. His dual major areas of study were History from the College of Liberal Arts and Accounting from the Business School (qualified to sit for the CPA examination), with dual minors in Philosophy and Political Science. He has enjoyed Adjunct Professorships in the Duquesne University Graduate Leadership Master Degree Program (The Leader as Entrepreneur; Developing Leadership Character Through Adversity) and the University of Pittsburgh Law School (The Anatomy of a Deal). He is admitted to various courts throughout the United States of America.
Gregg Zegarelli , Esq.,?is Managing Shareholder of Technology & Entrepreneurial Ventures Law Group, PC .?Gregg is nationally rated as "superb" and has more than 35 years of experience working with entrepreneurs and companies of all sizes, including startups,?INC. 500, and publicly traded companies.?He is author of One: The Unified Gospel of Jesus , and The Business of Aesop ? article series, and co-author with his father, Arnold Zegarelli , of The Essential Aesop: For Business, Managers, Writers and Professional Speakers . Gregg is a frequent lecturer, speaker and faculty for a variety of educational and other institutions.
? 2024 Gregg Zegarelli, Esq. Gregg can be contacted through LinkedIn .? 2024 Gregg Zegarelli, Esq. Gregg can be contacted through LinkedIn .
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