Fanis the bodyguard Episode 25 Lying About Taxes

                Kera is in her flat in London, England.  Kera’s path didn’t project as you would think.  As a 2^nd generation Greek American that went to Greece every year, it seemed odd that she would end up being a Chinese artifact dealer.  With no ties to England, you would think that she would stay in her native New York and if she were to venture to Europe, it would be to Greece, which she was very familiar with.  Instead, she became fluent in Mandarin and moved to England.  As she didn’t know anyone in England when she moved there and she was constantly working even when she lived in New York, she didn’t have a plethora of people she hadn’t grown apart from that she could trust.  Like many things in her life, she took a route that one wouldn’t suspect for an untrusting individual. She hired her cousin to be her bodyguard.  First, she paid for him to be proficient in weapons and hand to hand combat.  The odd thing was that Fanis, her cousin, also didn’t trust anybody. 

                Although they now live in Europe, like the rest of the world, Kera and Fanis are still heavily interested in US politics.  They sit down to watch the Democrat Debates.  Given the previous ones, they aren’t very optimistic that it’s going to be very good.  The difference between now and then is that Elizabeth Warren is now leading in some polls.  She has captured the socialists away from Bernie Sanders so she continues with her universal healthcare talking point.  The difference between her plan and Bernie’s is that Sanders admits that he would have to tax the middle class whereas Warren does not.  She is asked point blank if taxes on the middle class will go up like every economist has guaranteed.  Undeterred, she sticks with her talking point that corporations and the wealthy will pay more in taxes and the costs for the middle class will go down.  Kera knows that Fanis hates all the Democrats and socialism so she throws up her hands and announces, “There you go” to spite him.

                Fanis gives her a dirty look but she just smiles back.  He replies, “It was a yes or no question and she deflected about a sob story about healthcare.”

                “They always do that.”

                “Doesn’t make it right. Look before I started working for you, I worked in accounting. I also technically studied economics in college. I know a little bit how taxes work.”

                “Why don’t you enlighten me then” She rejoined sarcastically

                “There’s a thing in economics called ‘pareto’ improvement, in which you make people better off without harming anyone.”

                “That would be nice.”

                “So, Universal healthcare will help some people.  It, however, is not a Pareto improvement because it will harm hundreds of millions of people.  In economics, they simplify the world.  Everyone is worth the same.  If the number of people who are better off is greater than the number of people that are harmed, it’s a good idea.”

                “That makes sense.”

                “You’d be surprised how you’d change your mind because, and this is a common problem with non-conservatives, you never think about degree.”

                “Now you lost me.”

                “Let’s say there’s a policy where 10 people get an additional $100.  That’s great right? 10 people are better off.  One person, however, loses $900.  From an economics perspective, it’s good because 10 people are better off and only one is worse off.  Even as a whole, there’s growth because the combined good is greater than the combined bad.  Others, however, may say that you only marginally helped 10 people and destroyed one person in the process.  After all, I spend $100 sometimes when I go to dinner.  Did the extra $100 really help me that much?  If I dropped $900 on dinner, however, that would hurt a little more.”

                “You’re missing the point.  Middle class taxes will go down.”

                “No, that’s a lie.  She didn’t even say that, she said ‘costs.’  You see how she changes the question to make it better?  Nobody asked about costs they asked about taxes.”

                “Alright but healthcare costs will go down.”

                “The government may take some of the administrative costs but you’re still going to pay more in taxes than you would’ve paid before on administrative healthcare costs.  The only reason she says costs will go down is because she doesn’t include the additional taxes as a cost.  To you, however, it’s still money you can’t use for other things.”

                “Well, if that’s true, then I would say she’s lying but I don’t think that’s true.”

                “She’s lying no matter what.  Costs still go up with her plan.  Economists estimate that health spending would increase by $6.6 Trillion over a decade despite the government taking some of the administration costs of the people.  There’s no way in which she’s telling you the truth.”

                “Well, if she lies, she’ll just be punished when she tries to get re-elected”

                “Are you serious?  What about when Obama said that if you like your plan, you can keep it?  That was a lie, he wasn’t punished.  Even if you want to, you’re stuck with her for four years.”

                “Kind of like how we’re stuck with Trump?”

                “Except our economy is doing phenomenally under Trump.”

                “For now, we’re due for a recession.”

                “And you don’t think that we have gone the longest in US history without a recession because of Trump’s policies?”

                “No, we had Obama for most of it.”

                “Who was recovering from a recession.”

                “That was started under Bush”

                “Bush limited the recession to only a year and half.  The economy was recovering and growing before Obama took office.”

                “And he continued it”

                “With the slowest recovery in American history.”

                “We can finish this later.  We got to go.”

                “Where to?”

                “Dublin”

                “Oh, alright so quick flight.”

                They get on the plane and head to Dublin.  Kera turns to Fanis and utters, “Alright, so what about Bernie Sanders because you say that Warren is just a liar.”

                “He’s a hypocrite.  He attacks billionaires and millionaires and complains that there are three people that have more money than the bottom half combined.  Meanwhile, he’s a millionaire.”

                “He just wants rich people like him to pay their fair share”

                “What is their fair share?”

                “You want a number?”

                “Yea, we can take any group.  Let’s just start with the top 20% of earners.  How much of the total taxes should they pay?”

                “I would say probably like 45%”

                “Wow, you just gave them a huge tax cut.”

                “What do you mean?”

                “The top 20% of earners pays 80% of the taxes.”

                Kera swallowed hard.  “Well, again, I know how gullible you are so I don’t know if that’s true.”

                “Check the CBO or any tax agency.”

                “I will do that but obviously Sanders doesn’t think it’s fair”

                “Well, when you pay taxes you can volunteer to pay more than you’re supposed to.  Bernie Sanders never has so if taxes are such a great net good and government is better at distributing money than the private sector, why doesn’t he donate more than he needs to?”

                “He’s just saying that millionaires are greedy.”

                “He’s a millionaire, so does he include himself?”

                “Whatever, bottom line is there’s something wrong in America.  You have a lot of really rich people but then there’s homeless people and massive student loan debts that drown college kids.  I’m still paying mine and I just turned 31.”

                “Both of those problems are government created problems”

                “I know you think that”

                “Why else do you think that you see more of it in cities with Democrats in charge or, who have bigger government?”

                “There’s more people in those cities.  It’s harder to house them all.”

                “Houston has a big population, they don’t have that problem.  Detroit is not one of the largest cities and it has it worse than probably any other city.”

                “Do you ever stop to think that there may be a reason that nobody sees the world the way you do?”

                “Well, you called me gullible but it’s the opposite.  There’s two types of people that see the world differently; the superrich and the superpolitical.  The Superpolitical realize that almost every single major problem in the world is caused by central planners.  Once you realize that, you can’t unsee it and you can’t see the world in the same way.”

                “Given that you graduated from one of the most expensive schools in the country with only $5,000 in student loans, I think you suffer from both.”

                “The super-rich don’t pay any student loans.  They pay other people’s student loans as an investment opportunity.”

                “Fine, but you were upper middle class and didn’t worry about money growing up.”

                “Who cares?  I know that in 2009, the government took over student loans and the cost of tuition skyrocketed.  Luckily, I graduated in 2006, or else I may have had more than $5,000 in student loans.”

                Kera and Fanis landed in Dublin and checked into their hotel.  It was still early so they went to St. Patrick’s cathedral and walked around.  Every time they went to look at a map, at least three Irishmen would come and offer to help navigate them.  The people of Dublin were so nice and they were enjoying every minute of it.  As they walked into the catacombs of St Patrick’s cathedral, they were awed by the intricate detail of the sculptures.  It’s not only that they were wearing vests over long sleeve shirts but the button holes were so intricate that you felt you could button the vest if need be.  They went to dinner and thought to go to a bar to try fish and chips.  Unfortunately, it wasn’t very good. 

                After going to a pub to drink beer with the locals, they return to the hotel and catch some sleep for their meeting the next day.  Fanis was standing in the room while Kera negotiated the sale.  The security guard for the client was also by the door.  Fanis had become accustomed to having a conversation with security while keeping an eye on Kera.  The guard muttered, “Hey, I’m Colin”

                “Fanis”

                “Nice to meet you”

                “Likewise”

                There was no hand shake just a slight nod of the head.  They had to look official.  “I was on the plane with you yesterday.”

                Fanis had a perplexed look.  Was this coincidence or were they being followed.  Why was this man in London yesterday?  More interestingly, how did he notice Fanis when he wasn’t supposed to know him?  He reasoned that security guards are supposed to be observant.  “What were you doing in London?”

                “Personal matter.  I overheard you talking about the student loans in America.  You really think it’s the government’s fault?”

                “Yes.  Besides the 2009 trend, I actually have the numbers for when it really got bad.”

                “When was that?”

                “Before 1978, only poor people got subsidies to go to school.  In 1978, they extended it to the middle class.  When that happened, tuition skyrocketed.  They raised by over 1,200% while inflation only went up 229%.  Before that, college costs raised with inflation or even below it.” 

                “I don’t understand why”

                “Yea, I know.  It’s hard to explain because somehow people believe people are good and nice.  History has proven otherwise.  Everyone believes that if someone is selling something and you give him money, he will lower his prices since he doesn’t need customers to make money anymore since he’s getting outside money to support him.  That’s not how it works though.  What happens is you stop trying to please your customers and release shittier products and then raise the prices because you don’t want to get rid of it for less.  Take this case.  If tuition is $10,000 without any government help, and then the government decides to donate $1,000 toward that tuition to help out the student.  Everyone thinks that the school will keep the price the same and the student will only have to pay $9,000.  Instead, the school raises the tuition to $11,000 because the student doesn’t care because he’s still paying the same price but the school gets more money.  They think everyone wins but really you raised tuition.  In this case, the student is still borrowing the $1,000 and has to pay it back so his loans go up.”

                “Deans are assholes.”

                “It happens across the board.  During the Great Depression, the government subsidized farmers thinking that bottom up tactics work so when everyone was starving, they made food more expensive.  Farmers kept their prices high because the government was paying them so they didn’t need to make money by feeding the populace so they could keep their prices high.  The results were people starved and we call it the great depression.”

                “That brings me to the second thing you mentioned.  You said that central planning causes homelessness.”

                “In America, we have zoning laws.  They became popular in the 60’s and took off until Reagan became president then they stopped.  After Reagan was gone, they resumed at an expedited rate.  Since it costs more to build housing in a city, the rents skyrocketed too.  Since there was so much red tape to build more apartments, and the population is constantly growing, you have increased demand with stifled supply.  Simple economics; that leads to a jack in prices.  With housing getting more and more expensive, you have less people that can afford housing.  What results?  More homelessness.”

                Kera gets up and Fanis knows that the meeting is over.  He shakes hands with Colin and leaves.  Colin is stocky at around 5’9” with pale skin.  Fanis is 6’0”and heavyset.  As they leave, Kera wants to go around the city and see the lesser known churches.  Dublin is not a big city but walking around cities is Kera’s favorite thing to do.  Kera declares, “Back to Warren, when she talks about how rich people made money off the backs of the infrastructure workers that built the roads and worked for them.  Then you have cops and fireman that keep them safe.  You don’t think that they owe it to give back?”

                “There’s nothing to give back, it was their tax money that funded all that.”

                Suddenly, they heard someone call out, “You Americans always complain about taxes.  You broke from England because of taxes but you don’t know how good you have it.  The collection of wealth is much worse in other countries than it is in America.”

                Kera and Fanis look at each other unsure why he sounds so mad.  Fanis speaks up, “I didn’t say we had it bad, I’m merely suggesting that Elizabeth Warren is full of shit.”

                “Well, what do the rich pay?”

                Fanis looks up and around then shrugs in his shoulder.  Why not talk taxes?  “According to the tax foundation, in 2016, 140.9 million taxpayers earned $10.2 Trillion.  Of that, they paid $1.4 Billion in taxes.  That means that 1% of the people paid 40% of the federal income.  How can you say they’re not paying their fair share?”

                “That’s just the really rich.  They don’t care about money so they can afford all that.  It gets worse as you go down the classes.”

                “The top 50% of earners, that’s half, pays 97% of the taxes.  I’m not sure why you think the poor get screwed when they the bottom half of people only pay 3% of the taxes.”

                “That doesn’t sound right.”

                “Why not?  Do you know that America has a progressive tax system?  That’s how it works; the more money you make, the more percentage you pay.”

                “You seem to know a lot about taxes for a bodyguard.”

                “This wasn’t always my profession.”

                “I knew to be wary of you people.  You’re not Americans.  You (meaning Fanis) look white but she (Kera) is no American.” Kera has olive skin and she went tanning to make herself even darker.  She had sharp facial features and long black hair standing at 5’4.” Due to her dark features, she could pass for Middle Eastern.  Ireland has been accepting Middle Eastern migrants for a while now but the local population was beginning to push back on this as their culture was deteriorating and a lot of them were driven out of their homes.  Economics worked in Ireland too.  You have a small island and an influx of people with limited housing.  This drives the prices up so rents in Ireland were rising based on their open border policy.  The man continued, “We don’t like you Muslims coming over here and competing with us for housing.”

                “We’re Christians and we are leaving in a couple days.  We aren’t competing with you for housing.  Just for the record though; we’re Greek.”

                “Bullshit, that’s why you live in London with all the other Muslims.  It’s not even a European city anymore.  Hell, it’s not even an English city.”

                “Well, that is why they have Brexit and Nigel Farage has a following”

                “You Muslim men come here and rape our women.  I think it’s time I return the favor.”

                “Colin, you really don’t want to do this.”

                “Oh, so you do remember me?”

                “I just met you of course I remember you.”

                “Well, it’s time for you people to know you’re not welcome.”

                Kera was getting worried and Fanis stepped between her and Colin.  Colin threw a punch and Fanis ducked under it and then fired two left jabs to Colin’s kidneys.  When Colin swung back, Fanis again ducked and came up uppercutting with his right.  Colin backed up and grabbed his jaw.  Fanis put his hands up and stated, “I don’t want to fight man.  We’re not Muslims.  We’re Greek Orthodox and leaving in a couple days.  We don’t live here.”

                “So don’t” Colin seethed as he charged Fanis and tackled him to the ground.  Fanis thought the fight was over and was caught off guard.  At this point, Kera ran and got a cab back to her hotel.  Colin mounted Fanis and rained down fists.  All Fanis could do was cover his head with his arms and scrunch his shoulders up to give his face as much protection as he could.  Fanis times Colin’s punches and then moved his head at the last second so that Colin nailed the ground with his right fist.  Colin winced in pain and Fanis used this opportunity to shove Colin off him.  They circled each other with Colin’s right knuckles bleeding and Fanis’ head streaming blood.  Fanis threw his left as a decoy and came hard with his right.  Colin ignored the left and blocked the right backhanding Fanis across the face after he stopped the swinging momentum.  Colin locked up Fanis’ arms and they shifted trying to get an advantage.  Colin crouched down making it harder for the taller Fanis.  Colin finally got a dominant position and flipped Fanis onto his back.  Fanis immediately used his right leg to neutralize Colin’s arm by raising it to Colin’s shoulder on the inside of his left arm.  Colin swung and Fanis kicked his clavicle raising his torso enough for Colin to miss.  Fanis replaced his leg on Colin’s shoulders and quickly swung his arms to trap Colin’s right arm in Colin’s right armpit.  Fanis then raised his left leg to interlock ankles with his right and flexed his feet.  Colin was now being choked by his own arm.  Fanis leaned back for the triangle chokehold was locked in deep.  Now it was just a matter of waiting. 

                Colin felt his breath fading and his head getting light.  He knew he had to get out of the hold but didn’t know how.  He then had an idea. His left arm may not be able to get the momentum to swing since Fanis’ legs will block it, but he finally saw an out.  He moved his body forward and reached out with his left arm and jammed his thumb into Fanis’ left eye.  Fanis tried to wait him out but when there’s someone pushing on your eye, it’s not a pain you want to endure very long.  Fanis let go of the hold and shoved Colin off him.  He got up and blinked rapidly.  Colin shot up and punched Fanis in the kidneys and drove him to a bench shoving Fanis’s upper body against the back of the bench.  The shots came back to his kidneys and Fanis lifted his right leg and stomped down on Colin’s right.  He then shot his head back and smacked the back of his head against Colin’s mouth.  As blood filled Colin’s mouth, Fanis turned to his left and put his entire 215 pounds behind a right hook that smacked against Colin’s temple.  It hurt Fanis’ hand but Colin was out cold.  He hobbled off as the kidney shots took their toll.  He hailed a cab and went back to the hotel. 

                When he got back, Kera greeted him with a hug.  Fanis hugged back and undressed himself as he lied down on the bed.  Kera asked, “Are you alright?”

                “Yea, I’ll be fine, I just need to rest.”

                “What happened?”

                “He got in some good body shots but I knocked his ass out.”

                “You feel like going out?”

                “No”

                “Alright, I’ll get room service.”

                “Thanks”

                “You look okay, you got a little blood on your face but other than that, not bad for someone that just got in a street fight.”

                “You can’t see the pain kidney shots cause.”

                “Alright, do you want to talk more about Warren?”

                “Well, after everything I told you about how much the rich pay in taxes, how can you not think that when she doubles the federal taxes, it won’t affect the middle class when 50% of people already pay 97% of the taxes?”

                “Just take more from the uber-wealthy”

                “The top 1% already pay a tax rate higher than the bottom 50% pay”

                “Well, yea that’s how progressive taxes work.”

                “There was a New York Times piece that tried to deny that.  I thought it might have corrupted you.”
                “I’m curious about the numbers.”

                “Well, the CBO says that the top 1% pays 33.3% tax rate while the poorest 20% of the population pay 1.7%.  Even tax policy center, which is known to be liberal, shows similar rates.”

                The food came and Fanis and Kera ate and took it easy.  The next day, Fanis and Kera went around Dublin again.  The next day, they flew home.  Kera remarked, “So I was reading that New York Times study.”

                “Oh God, so you did get corrupted”

                “Well, you just talked about income tax.  They were talking about the combined taxes with State, Federal and local.”

                “No, that’s what I mean by that 33.7% to 20% number.”

                “But you didn’t take into account the percentage of the money that they make.  You only talked about the percentage of taxes they pay.”

                “The richest tax bracket is the only tax bracket that pays a greater percentage of the tax burden than the percentage it represents in the cumulative money pool that is the American economy.”

                “So, Saez just lied?”

                “& Zucman.  Yes but it’s not denying these numbers.  It’s that they cheated and made wrong assumptions.”

                “You’re going to have to explain that.”

                “Saez & Zucman made the tax rates lower in the richest tax bracket by assuming they made more than they did.”

                “Why would they do that?”

                “The IRS always rounds up because they assume people undervalue their income.”

                “Well, they do.  If my parents give me money, I don’t declare that.”

                “Right, just like when I win money in Vegas I don’t report it.”

                “So what’s the problem?”

                “The higher you go up the income latter, the less underrepresented your declarations are.  This is because if you make less than $50,000 a year, you’re more likely to be stuck by lightning twice than be audited.  The rich get audited all the time so they have to be more careful.  Also, it’s the nature of their business.  People rarely are just handing them money.  Whereas, if you’re a waitress or a delivery man, you get cash tips.  You don’t declare exactly how much you were tipped.  What Saez did was assume that the same percentage of underreported income for the poor was the same as the rich.  This isn’t true.  Since the tax rate is the amount you pay divided by how much you earn, if you make the denominator higher, the number goes down.  Rich people can’t hide as much of a percentage of their income as poor people can.”

                “Well yea because a five dollar tip is a higher percentage of their income than the same $5 to a rich person.”

                “Exactly, to make matter worse, if you really want to include ‘everything’ then you should include tax refunds.”

                “Saez & Zucman didn’t?”

                “Nope, and that wipes out the entire tax burden for some.”

                “Yea, I know.”

                “Did you know that the top 1% paid a greater share of individual taxes (37.3) than the bottom 90% combined (30.5%)?”

                “I did not know that but I think you made your point.”

                “Maybe but you still don’t believe me.  That’s what’s frustrating.

                “What about the really rich.  Not 1% but like hugely rich.”

                “The top 0.01%?”

                “Yea”

                “They pay 50% of the combined Federal, State and local tax.  This is 20% higher than what Saez-Zucman said.  The bottom group is 13% not 20 like the Saez-Zuchman study claimed.  So yea, they did lie too.”

                “That’s enough tax talk”

                They land in London and go back to their flat.  Given the short flight, they hardly felt they went on a vacation.  They hit the routine quickly as travelling was something each had been doing their whole lives so were very accustomed to it.  Fanis recovered from his fight but was still unsure why Colin was insistent they were Muslims.  Buddhist maybe since Kera is fluent in Mandarin and deals in Chinese art but that’s not where he went with it.  He put it out of his mind and waited for the next time Kera had somewhere else in the world where she could either buy or sell Chinese artifacts. 

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