Traders should not care whether a candidate is Republican or Democrat. It’s the tax flow that matters.

People connect for the purpose of exchanging value. No value, no reason to connect. Money is energy that we exchange with each other. The State seeks to extract a portion of that energy in the form of taxes. It uses market transactions as generators of taxable events. The taxes collected on these events fund the bonds issued by government that are in turn used by government for two reasons:

1. Create programs that are exchanged for votes.
2. Create funds that direct money to the private sector, i.e., research and development, so that taxable events are generated and private sector electoral support for government is created.

The bottom line is to extract energy from the masses, the energy that feeds the State.

The executive, judiciary, and legislative narratives found in executive orders, court opinions, or statutes cannot be brutally honest about the coercive nature of the State. The coercive nature of the State must be hidden, encased in a message that the government is here to help. This message, along with fiscal packages, legitimizes State coercion.

(Ready for a trader challenge? http://toptiertrader.com/?ref=1449 )

Traders benefit from coercion where government bonds are made available for sale. The bonds held by traders can be used as collateral for credit (cash) which then is deployed into domestic or foreign securities or some entrepreneurial enterprise. The trader wants bonds and other contracts in her portfolio that provide good collateral for her margin trades. For this reason, she wants an executive power that compels tax payments and is efficient in collecting taxes.

Traders want a slate of executive and legislative candidates that will not change the tax regime. Traders do not want overall lower tax receipts. Traders want sustainable tax flows that support coupon payments, bond value, and yields.

Even if candidates craft a narrative that conveys to the voter an intent to cut her tax rates, that narrative should not support cutting tax receipts or alter the allocation of tax revenues to bonds.

I perceive that neither Democrats nor Republicans want to reduce the amount of taxes collected by the Treasury from taxpayers. Traders, including market makers, should be indifferent to Republicans or Democrats. Unless candidates support some social agenda that the trader finds disagreeable or the trader has two or three hours free on Election Day, the trader need only limit their participation in electoral politics to making a campaign donation to both a Democratic and Republican political action committee.

Alton Drew

4 October 2023

For more of my insights on the American political economy, buy my book on amazon.com/author/altondrew.

Disclaimer: The data and output from this blog post does not constitute investment or legal advice and is not a personal recommendation from Alton Drew.  Nothing contained herein constitutes the solicitation of the purchase or sale of any futures or options.  Any investment activities undertaken will be at the sole risk of the reader.  Alton Drew expressly disclaims all liability for the use or interpretation (whether by visitor or by others) of information contained herein. Decisions based on this information are the sole responsibility of the reader.  Any visitor to this page agrees to hold Alton Drew harmless against any claims for damages arising from any decisions that the visitor makes based on such information.

This page may contain affiliate links.  If you choose to make a purchase after clicking a link, I may receive a commission at no additional cost to you.  Thank you for your support.