Another Taxing Question, III: Why Tax at All?

Everybody hates taxes.  Or, rather, everybody hates paying taxes.  Everybody loves what taxes do, especially when it’s done for them.

Another Taxing Question, II: The Most Just Way to Tax

Yesterday we looked at the income tax as a tax.  Is it unconstitutional?  Is it just?  We decided that if you can believe the United States Supreme Court, the income tax was constitutional prior to the Sixteenth Amendment . . . but only if it was levied unjustly.  If it were administered justly, then it would be unconstitutional!  The Sixteenth Amendment fixed that little problem, making an income tax levied justly constitutional.

Another Taxing Question, I: Direct v. Indirect Taxation

We may have said once or twice on this blog that the Sixteenth Amendment did not make a previously unconstitutional income tax constitutional.  Rather, the Sixteenth Amendment made a direct tax constitutional without apportionment among the states on the basis of population.  Before that, however, the Congress had already enacted an income tax twice, only the second of which was challenged in court.

News from the Network, Vol. 9, No. 33

Some important events happened this week, as you can see for yourself, so we’ll get straight to the news items:

Is the United States the Enemy of Freedom and Democracy?

Recently we came across a (relatively) new weekly webzine, the New World Standard Critique (Many Perspectives, One Focus).  One of the most recent articles was “Gorbachev Accuses U.S. for Preventing Russia from Becoming a Strong Democracy.”  Gorbachev is quoted in an interview as stating that the “goal [of the U.S.] was . . . to prevent the emergence of Russia as a powerful democratic state.”

“A Look at the Future”, III: Financing the Future

Yesterday we looked at a few problems with Harold G. Moulton’s vision of the future.  They were not very important, and are easily corrected simply by adding expanded capital ownership along the lines developed by Louis O. Kelso and Mortimer J. Adler.

“A Look at the Future”, II: Labor Productivity?

Yesterday we started looking at Harold G. Moulton’s vision of the future.  What we saw was good and positive.  Today, however, we look at something with which we disagree, and why we say that, for all his genius, Moulton would have benefited from a conversation with Louis O. Kelso.

“A Look at the Future”, I: Star-Gazing?

Will Rogers once said all he knew was what he read in the papers.  We can’t help wondering how much more people would know today if they could say that much.

News from the Network, Vol. 9, No. 32

Despite the dog days (or, for dog lovers, the cat days . . . except there’s no Cat Star to counter Sirius), there has been a good amount of action this week, starting off with a group that has republished some important articles, and all without having to be asked:

Let’s Talk About . . . Job Creation

It’s a standard political promise.  “Vote for me instead of The Evil Candidate and I will create a gazillion new jobs!”  “Vote for me instead of The Stupid Candidate” and I will create a humongoid number of jobs!”  “Vote for me instead of The Evil or The Stupid Candidate and I will make every child, woman, and man a capital owner so that everybody gets an adequate income from capital, labor, or both, whichever best serves the needs of the individual and the community together!”

The Gold Standard? Which One?

A number of people believe that all of our financial and monetary problems — and economic ones as well — would be solved if we just went back to “the gold standard.”  Some people dismiss this as sheer fiscal romanticism, while others think it’s the only way to go.  There’s enough truth in either extreme to make both positions plausible . . . as long as someone doesn’t understand money, credit, banking, and finance.

About That Income Tax. . . .

Everybody (okay, a lot of people) in the United States think that the Sixteenth Amendment to the Constitution made an income tax constitutional.  If we could just get rid of that, everything would be perfect for everybody, just as it was in 1912 before anybody had even thought of an income tax . . . wouldn’t it?

Usury Question and Answer

As loyal readers may have noticed, we like to get those softball questions to answer . . . you know, the kind from people who clearly don’t know what they’re talking about, but who “jus’ gotta” show somebody else up.  Next best, of course, are those who make a snarky comment asserting something that we know isn’t true.  Take for instance the following comment we got in response to someone coming across our ideas on monetary reform, i.e., interest-free money and the Banking Principle:

News from the Network, Vol. 9, No. 31

This week, for some reason, Illinois has been popping up on the radar.  This is interesting, because a number of Just Third Way projects and initiatives have come out of the Prairie State, such as the proposal to revive East St. Louis and the Metro East area.  Plus, the state covers pretty much the entire U.S. economy in microcosm, with important urban areas not far from agriculture and mining.  That’s why most of this week’s news items are Illinois-centric:

Future Schacht, XIV: Schacht v. Hitler

Up to a point, Doctor Schacht’s career duplicated that of any typical German of his era.  During Hitler’s rise to power, he was an enthusiastic supporter of the future Chancellor, using his prestige in the business and financial community to solicit signatures for a petition to have Hitler appointed Chancellor, going to the length of urging the current Chancellor, Franz von Papen, to resign in Hitler’s favor.

Future Schacht, XIII: Understanding Money

To understand the importance of Hjalmar Schacht, we have to understand money, and that means understanding property.  Money, as it is a medium of exchange of wealth and claims to (i.e., “property in”) wealth, is naturally an extension of and derivation from the concept of property.  Destroying the integrity of property therefore eventually destroys other human rights, as well as the currency, and even the concept of money.

Future Schacht, XII: The Decay of Private Property

As we have seen in this series, while the rest of the world quickly rebounded from the brief recession following World War I, Germany, Austria, and Hungary plunged into what seemed a bottomless pit of despair.  If there is any question as to why a people so eminently civilized as the Germans permitted someone like Adolf Hitler to come to power, one need look no further than the unmitigated horror that the nation endured in the early 1920s.  Ground between the upper and nether millstones of reparations and hyperinflation, people were willing to follow anyone who could promise them order and security again.

“I’m New to Distributism”

Last week we had such a positive response to the “G.K. Chesterton v. Modernism and Socialism“ posting that we decided to do another one.  This is not shameless pandering just to get more readers.  Okay, so it’s shameless, but it’s not pandering.  First, we’re not acting as a go-between in an illicit sexual intrigue, and second, we’re not catering to the lower tastes and desires of others or exploiting their weaknesses . . . unless, of course, you consider a taste for things Chesterton a lower taste, desire, or weakness.  There you might have us.

News from the Network, Vol. 9, No. 30

As of this writing, the stock market is soaring like an eagle on the news that 255,000 jobs were “created” in July (which begs the question of how many jobs were “destroyed”).  For some strange reason, however, the “unemployment rate” (which really doesn’t measure the unemployment rate) stayed constant at an alleged 4.9%.  Does that mean that as many jobs were “created” as were “destroyed”?  Does it mean anything at all?

Future Schacht, XI: How Did Hitler Gain Power?

Although Hjalmar Schacht had performed the seemingly impossible task of stabilizing the German currency and financial system (and thus the economy) during the inferno of the hyperinflation, not even “the Old Wizard” could take away the fear that the hyperinflation and the chaos would return.  The fear, more than the actual economic conditions, was probably more responsible than any other single thing that gave Hitler and his followers the opportunity to consolidate power.

Future Schacht, X: Woe to the Conquered

During World War I, both sides had been reluctant to finance the war by raising taxes.  Consequently, the only option for financing was to sell government debt.  In France, for example, no new taxes were imposed until 1916, and the war debt reached astronomical proportions.  As early as December 1914, the French government had an outstanding floating debt of over US $750 million.  In November 1915, the French government floated its first long term debt — in the amount of US $3 billion.

Future Schacht, X: The Forgotten Hyperinflation in Austria

As in the Second Reich, the lid had been kept on inflation in Austria during World War I through strict rationing and price controls.  As soon as the war was over and the government abolished by the Allies, the situation quickly adapted to the removal of controls, and began to act in accordance with the laws of supply and demand.  This was not helped by the imposition of a blockade that continued for several months after the official end of hostilities.

G.K. Chesterton v. Modernism and Socialism

We’ve been reading Edward R. Pease’s The History of the Fabian Society (London: Frank Cass & Co., 1963, revised in 1926 from the 1916 first edition, with comments and editing by George Bernard Shaw, a long time member of the Fabian Society), an organization to which G.K. Chesterton and his brother Cecil once belonged.  That is, to which they belonged until they saw the light and shook its dust from their sandals.