The Rich Shouldn’t Pay Any More in Taxes

by

In the Old Testament times, Moses needed money to buy the resources needed to build the tabernacle. The tax imposed on the people was a per-capita tax, imposed such that no one could even cover the tax for another. Each had an equal share in the construction of the tabernacle, and no one could claim any more ownership than anyone else.

If you think of government in those kinds of terms, then you remember things like we are all equal under the law, that no one person is more important than any other, and so on and so forth.

And when you think of a fair kind of tax, you will naturally be lead to the idea that everyone should pay equally into the system, because they are all equal owners and all equally benefit.

Of course, leftists don’t see it this way. To them, taxes are merely another device to exercise their covetousness. Rather than work and earn money, they believe those who have worked and earned their money should be forced to give it to the poor. Thus, the rich should pay more. This is the system we live under, and it is grossly unfair.

One of the most important ways it is unfair is that it discourages wealth creation.

I saw a political cartoon once. In the left panel, the boss is telling the unemployed worker that he can’t hire him because he doesn’t have the cash to do so. The title is “Reality”. The right panel has the boss telling the unemployed worker that he can’t hire him because taxes are too high, the future is uncertain, and some other obviously invented reasons. The title is “Republican’s Ideas” or something like that.

Of course, the cartoon shows more about the artist than it does in real life. A successful business doesn’t need cash to hire workers. Or rather, if the business is successful, and if expanding it would make it even more successful, then hiring is not an issue because it’s a no-brainer to find more cash to hire people.

However, changes in the tax policy and government policy in general which make predicting which business actions will be successful mean that even if the business is flush in cash, it will not spend it. The simple reason is because that may not be a wise investment of the cash. Certainly in uncertain times, when taxes are high and profit margins low, businesses without surplus cash have an even more difficult time finding cash to invest in their business.

What tax policy would most encourage wealth creation? A system that builds stability and consistency, that doesn’t punish in any way the act of wealth creation.

The latter requirement means that wealth creation, that is, manufacturing, buying, selling, hiring, firing, any economic activity is strictly off-limits for taxation. Sorry, Fair Tax crowd. Your tax still discourages wealth creation because it is a disincentive to spending.

What kind of tax are we left with? The only thing left to tax is life itself, a per-capita tax like Moses had.

What the government could do is offer two taxes. For a higher rate, taxpayers could pay their lifetime per-capita tax, and never owe another dime in taxes again. For a lower rate, taxpayers can pay weekly, monthly, or annually. Everyone ends up paying the same amount per year, with taxes increasing as the dollar falls in value. (That’s why lifetime payers pay a higher rate.)

Of course, those who understand what money really is and where it comes from know that we can run government without raising a single red cent in taxes.

To understand this, consider King Henry I of England. He took sticks, polished them, cut notches to indicate their value, and then split them down the middle. He kept one half, and used the other half to buy things. These Tally Sticks are still valuable today, several hundred years later. Of course, he made people pay their taxes with these tally sticks, so people had to get their hands on at least a few of them, driving their value up.

If sticks can be money, then anything can be money. We already know, quite well, what makes some money more useful than others. It’s not rocket science. We can create money by printing colors on pieces of paper. It’s not rocket science, and it isn’t expensive. Congress can, using the powers it already has through the constitution, simply start printing money, in appropriate amounts (according to our modern understanding of money), and use this money to buy the things the country needs.

Simply put, they would print about as much money as the economy grows. If there is 3% growth in a $14 trillion economy, then they can print $420 billion, and not cause a single bit of inflation or deflation. $420 billion is more than enough to run the government for a year. Without any taxes at all, I suppose we’d see growth rates of 5%, 10%, maybe even 25% or even higher. This would make the amount of money congress has to print to keep the money supply stable ever larger. At 25% growth, congress would be printing 1/4 of the national economic value: #3.5 trillion dollars this year, .$4.375 trillion the next. The economy will double in size about every 3 years, so even if congress spends at hat accelerated rate, we would hardly notice because working in real jobs would benefit us far more than pursuing congresscritters for a piece of the pie.

After a while, congress would run out of ways to spend the money, at which point they can simply forward the surplus to the states in proportion to their representation or population. Thus, the states can enjoy the benefits of a tax-free economy.

This isn’t rocket science, but it does put a whole lot of rich people out of business, particularly banks who believe they have a natural right to create money out of thin air, and have a monopoly on money. They are free to create their own moneys. They demand they control the American dollar through the Fed is simply because they have found they need the artificial authority of government in order to fully exploit the people.

If you’re wondering whether anything like this has ever happened, it has, at least twice in our history alone. Kings and emperors stumbled upon it, creating vast empires and realms of unfathomable wealth, but they did not fully understand it.

The two times we experienced it were during the Revolutionary and Civil Wars. In the Revolution, congress issued scrip which ended up being better money for the Americans than anything else. In the Civil War, it was greenbacks, which the Northern states began using extensively. Since those times, incompetence and greed at various levels drove people back to more unreliable methods of managing money. After the Civil War, we experienced one deflationary cycle after another as the economy started to grow at unimaginable rates but money supply diminished.

The British Empire ruled the world by reading Adam Smith’s Wealth of Nations, which explains this phenomena quite clearly. It wasn’t until after WWII that they began to stop using this method of creating wealth, and that only because of the cancer that is communism that slipped into their drinking water.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: