Everybody hates
taxes. Or, rather, everybody hates
paying taxes. Everybody loves what taxes
do, especially when it’s done for them.
Okay, those are
pretty broad statements, and it’s easy to come up with exceptions. That’s not the point today, though. Today we’re concluding our short dissertation
on the income tax by asking, Would it be a good idea if we could figure out a
way to run the country without taxes?
The way you
answer that depends on whether you work 1) for yourself, 2) for somebody else,
or 3) for the government.
If you work for
yourself, the astonishing answer is “No!”
Do you really want the politicians to be able to do anything they want
without being accountable to anybody?
The only thing that holds them back now is the fear that they can’t
raise taxes and stay in office, or they might give the economy too hard a kick
in the teeth by increasing government debt just a little too much to get away
with.
The thing to keep
in mind is that money comes from production, production doesn’t come from
money. When productive people or
institutions create money backed by production, they know they have to deliver
whatever was produced to the people who accepted their money and want to redeem
it.
When unproductive
people or institutions create money not backed by something they have produced
or that they intend to produce, they have to obtain what other people produce
some way to redeem the money they issued.
If they redeem it, that is. When
you issue money, you obligate yourself on a debt. If you don’t redeem it, it’s called
“counterfeiting.” When a government does
it, it’s called “legal counterfeiting.”
Government by its
nature is not a producer of wealth.
Thus, when it issues money, the only way it has to redeem the debt is to
collect taxes . . . or issue new debt that it doesn’t redeem. So, if you work for yourself and produce
something, and the government issues debt instead of collecting taxes, it is
simply sparing you today to take more from you tomorrow.
What if you work
for somebody else? Does it matter how
the government gets its money? It sure
does. Henry C. Adams pointed out more
than a century ago that politicians who are not answerable to the citizens for
the money they spend are the single greatest danger to national sovereignty.
What about if you
work for the government? In that case,
however the government gets the money it pays you is probably fine and dandy .
. . as long as they keep paying you.
Even so, what if
the government could raise all the money it needs without taxation? Would they still tax?
As Harold G.
Moulton pointed out in his pamphlet The
New Philosophy of Public Debt (1943), the government would still levy
taxes. Why? Because by imposing taxes on some things and
not others, they can control and, if necessary, change people’s behavior to act
in ways those who control the government find acceptable.
#30#
