According to the Tax Foundation, April 21 is “Tax Freedom Day.” Ostensibly, this is the day the average American has earned enough to satisfy his “tax burden,” and for the rest of the year he is working for himself rather than government.
The truth is there is no tax freedom day. That’s because there is a hidden tax called inflation that saps your wealth on a daily basis.
Look at the dollars in your pocket. They are nowhere near the value of the dollars that you had as a child or that you may have stored under your mattress. Most people think that a dollar is a dollar. Not so. Today’s dollars (nominal dollars) are quicksand money that destroys financially all who trust it.
We have had fiat paper money since 1913, and most of that time it was being debased (inflated). Now it’s at more than a 96 percent loss. A 1913 dollar is now worth less than 4 cents. What cost $1 in 1913 now costs almost $24. According to Shadowstats.com, the true measure is it now costs $101.09 to buy what $1 bought in 1913. How did this happen?
It happened through inflation — which is not rising prices, as most have been lead to believe. Inflation is an increase in the supply of money, i.e., money printing by the Federal Reserve. The increase in the amount of money in circulation causes prices to rise as more money chases fewer goods. (For a more detailed explanation of inflation, see Educating The 95 Percent.
We are only as rich or as poor as the purchasing power of our money. Have you ever wondered why banks and politicians love paper money? Because they profit from it!
Nominal dollars are the everyday paper dollars that we think of and call money. These dollars change every day (depreciate). The value of these dollars goes down constantly as the money printers continue to debase our currency.
Now, the point is that Americans don’t know the difference. They don’t know that depreciating or nominal dollars by debasement is destroying their savings, their retirement and systematically impoverishing them. If this is not all-important, I don’t know what is!
Nominal dollars, or depreciating currency, is destroying America. America is a giant Ponzi scheme no different from the one pulled off by Bernie Madoff.
Sadly, most Americans also don’t know that Federal income taxes are not necessary to fund the government. I explained that in my column Income Tax 101: Do You Really Know What It Is?.
Because of the Federal Reserve — which is neither Federal nor does it hold any “reserves” — there is no freedom from taxation. There is no such thing as “Tax Freedom Day” in America.