The Wrong Conversation About Taxes
February 6, 2012 by Bob Livingston
The conversation about taxes in America is all wrong.
The political elites and the complicit media have convinced the vast majority that taxes are necessary to fund government. Politicians and wrongheaded economists bloviate about where to get the money to fund “necessary” government programs and about paying one’s fair share. Now comes word from the Congressional Budget Office that taxes will increase by more than 30 percent between 2012 and 2014.
The conversation is not being framed correctly, and that is by design. The messengers (propagandists) of the elites want it that way.
First of all, what is truly necessary to fund government; or, better yet, what is necessary government that must be funded? These are questions that are not asked. Politicians won’t address these questions because their goal is to accrue more power over the people through government. Politicians never relinquish power, and government never shrinks.
Think for a moment. In 2000, President Bill Clinton submitted a budget of $1.9 trillion for the 2001 year. Do you recall hardships, starving children, neglected old people or a military with antiquated weapons that year? For 2012, President Barack Obama feels his budget must be $3.7 trillion.
With few exceptions over the past 100 years, politicians have been corrupted beyond belief. They are amoral mobsters who now brazenly steal in the open. When they talk of “cutting government,” they are not talking about cutting anything. They are using doublethink on the American people, and the American people are buying into it.
Politicians believe that government must grow, so they operate under the assumption that a growth by a certain percentage each year is not really growth, but the status quo. So when they speak of cuts, what they are speaking of is cutting the rate of growth. Government never gets smaller. (The exception, of course, is Ron Paul, who has said he will cut $1 trillion out of government in his first year and eliminate whole government agencies.)
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If political winds do blow in the direction of reducing government (as they are doing now), politicians pledge to cut but never make real cuts. If the two parties do reach an agreement on what they call “cuts,” what they cut is the rate of growth — from 10 percent annual growth to 9 percent annual growth, for instance. And then they cry and moan about how the “draconian” cuts are going to cause children to starve, old people to be put out on the streets or hostile nations to invade the United States and overwhelm our underfunded military.
So the political elites then turn the conversation around to taxes. Inevitably, they will try to guilt you into wanting to pay more; or they will try to convince you that someone, somewhere who is richer than you is paying less than you, and that can’t possibly be fair.
Recent discussions over Mitt Romney’s tax returns bear this out. Obama and his fellow Marxists and statists from both sides are bemoaning the fact that Romney “did not pay his fair share” because Warren Buffett’s secretary — or some nebulous “working man” or “working woman” (whatever that means) — pays a higher percentage.
Never mind that Romney was forced to give $6.2 million the past two years to the government, paying a tax rate of 13.9 percent in 2010 and an estimated 15.4 percent for 2011.
In fact, Romney’s rate is far too high. His 13.9 percent rate in 2010 was 5.7 percent higher than the average effective income tax rate of U.S. households, according to The American Enterprise Institute.
But if this is the conversation, it is still framed incorrectly because the United States doesn’t need taxes to fund government. Income taxes are merely a means of controlling and redistributing wealth and providing government with a personal dossier of all Americans.
So-called income taxes, as defined and used by the socialist state, leads the people into a swamp of confusion by design. Socialism attracts corruption and corruption attracts socialism.
Income tax systems go hand in hand with fiat paper money systems. The money creators cannot create wealth, but they can transfer wealth with depreciating (inflating) paper money.
Governments make war on their own citizens by depreciating the currency. As the currency is depreciated (inflated), the people are impoverished. There is no way to protect financial assets with a fiat paper money system except exchanging fiat paper money for gold and silver.
Depreciating paper money is not a store of wealth. Gold and silver are. One can bury paper money to hide it so the money creators and tax collectors do not know where it is. Yet the state can steal the purchasing power of paper money by creating more paper money and diluting the buried paper money.
The transfer of wealth from the producers and savers to the government is a simple process of increasing the quantity of money. This fact eliminates the need for income taxes.
A government that can print money at will does not need taxes for funding. That’s what the government does through the Federal Reserve.
Former New York Federal Reserve Chairman (1941-1946) Beardsley Ruml said as much in a speech to the America Bar Association. He said, “The necessity for a government to tax in order to maintain both its independence and solvency is true for state and local governments, but it is not true for a national government.”
The speech was originally printed in American Affairs in January 1946. The publication’s editor wrote:
His (Ruml’s) thesis is that given (1) control of a central banking system and (2) an inconvertible currency, a sovereign national government is finally free of money worries and need no longer levy taxes for the purpose of providing itself with revenue. All taxation, therefore, should be regarded from the point of view of social and economic consequences.
Just as the need for taxes to fund the government is a myth, so is the national debt. As long as the people believe that the government owes money, the fiat regime can be extended further and further.
If the government admitted that it never intended to pay any debt, what would happen to the 100-year-old fiat paper money system? It would collapse overnight. Nobody can deny this.
Fiat is default from its inception. Yet national debt propaganda justifies the deficit. Debt propaganda covers fiat fraud with legitimacy.
Simply stated, as long as the people believe that government will pay its debts, they are not afraid of default. The concept of debt is more acceptable than default. No matter how massive the debt, the people still believe that government has the ability and the will to pay. But default is now, as well as certain in the future.
The fiat paper money monetary system is a confidence game. No debt will be paid. The whole system is Ponzi.
As confidence in fiat collapses, the government begins to step up the use of its police power against citizens. This is what is behind the passage of bills like the Patriot Act and recent National Defense Authorization Act, which enabled the indefinite incarceration of Americans without trial, and the recent attempts to censor the Internet.
The political elites are now growing fearful of an awakening by the populace. They attempt to blame the failure on the population but realize the seeds for a revolt have been sown, so they pass laws to protect themselves. And government directly attacks and confiscates the wealth of the people under a host of excuses and pretexts.
We are in the last stage of the collapse of the fiat regime. The confidence barometer is the price of gold and silver. The government seeks to suppress the price of gold to keep down the flashing indicator of the loss of confidence in government and in the system.
At some time, there will come a tipping point. Corrupt government will fail because a critical number of the people will realize that government is organized crime. Finally, it will become obvious that the modus operandi of government is to expand its power and size through a stealth transfer of wealth from the people to the government.
This stage is growing near. The next order of events is economic collapse and social breakdown. We are already past the breakdown of law and order where citizens do not have equal protection but selective enforcement of the law and rule by an oligarchy of unaccountable judges and Federal prosecutors.