It takes only two things to keep people in chains:
The ignorance of the oppressed
and the treachery of their leaders.
In previous posts, More tax BS raining down on your head and Examples of CNBC, Reuters, et al shoveling BS on your head, we told you about the several lies you would hear regarding tax plans, among which are:
Lie #1: Federal taxes fund federal spending.
Lie #2: Federal deficits and debt negatively impact economic growth.
Lie #3. You and your children will have to pay for federal debt.
Total, 100% BS
Federal taxes do not fund anything; they are destroyed upon receipt. Federal deficits are the private sector’s surplus, and so they stimulate economic growth.
And no one ever will pay for federal debt, because it isn’t debt as you know it; it’s deposits in T-security accounts.
But, believing the American public will continue to fall for the lies, the liars continue spreading the manure:
The Trump Tax Plan Is Government as Usual
Nick Gillespie & Todd Krainin | November 1, 2017
Despite big promises, it fails in its primary mission: paying for the actual cost of government Reason.com
Immediately, in the subtitle, you see the first dollop of excrement. Federal taxes do not pay for the actual cost of government.
The U.S. federal government, being Monetarily Sovereign, needs or uses no income. To pay a creditor, the federal government sends instructions (not dollars) to the creditor’s bank, instructing the bank to increase the balance in the creditor’s checking account.
When the bank does as instructed, new dollars are created. When those instructions are processed, they automatically are cleared by the Fed. No deductions from tax dollars are involved. That is why the federal government has the unlimited ability to pay its bills.
(You too pay your bills by sending instructions — in the form of a check or credit card notation — but the Fed clears your instructions by making a deduction from your checking account. That is why you do not have the unlimited ability to pay your bills.)
The hallmark of a good tax code is that it doesn’t attempt social engineering via revenue collection.
It’s our money and the government shouldn’t be telling us how to spend it or what to spend it on. And yet our tax code is larded up with all sorts of incentives for certain types of purchases—such as the mortgage-interest deduction, which is defended on the grounds that owning a home is morally and culturally superior to renting.
It’s not by the way, and the result is market distortions that saddle families that would be better off renting with mortgage debt. Trump’s tax plan keeps the mortgage interest rate deduction–and the one for charitable giving, which is another example of social engineering.
Federal tax deductions are not “distortions.” They merely allow you to keep more of the money you have earned. All federal tax deductions benefit the private sector, and do not, in any way, harm the federal government or federal taxpayers.
New York and California, being monetarily non-sovereign, do levy taxes to pay for goods and services that benefit taxpayers. There is no scenario under which taxing state and local taxes benefits the national economy.
The most important principle for tax reform is that revenue should cover the actual costs of government so that citizens can actually make an informed decision about what services they’re willing to pay for.
The authors don’t differentiate between state/local taxes vs. federal taxes. The former does pay for state/local government costs; the latter does not pay for anything.
And the notion that citizens can make “an informed decision about what services they’re willing to pay for” is ludicrous.
Total BS. If you paid $10,000 in federal taxes last year, what services did that cover? You have no idea. No one does. “Informed decision” is hogwash.
Trump’s plan would take even more people off the tax rolls. There are already over 40 million households that pay no federal income tax at all and the president brags that his plan would add another 31 million to that total.
As Chris Edwards of the Cato Institute writes, “taking more people off the tax rolls is not a good way to keep the government limited. If something is ‘free,’ people will demand more of it.”
The authors, Nick Gillespie & Todd Krainin, want you to believe that not being taxed for social benefits, will turn you into a lazy slug.
Thus, the only people who should receive federal benefits are the rich, since they pay taxes. The poor, who pay little or no taxes, should receive little or no benefits, according to the authors.
That is what the rich and their toadies, Gillespie and Krainin, want you to believe, and that is why the GOP tax “reform” bill is so heavily skewed toward benefits for the rich. Being rich, they say they “deserve” more than you do.
And the problem is much bigger than that. For decades now, the feds have been spending far more in any given year than they take in via taxes.
Last year, for instance, the government spent 20 percent more than it took in and between 2009 and 2013, it spent 33 percent more than it brought in.
And why is this a problem for a Monetarily Sovereign government? Gillespie and Krainin never say. It’s been, as they say, going on “for decades.” Starting in 1940, the federal debt has risen from $40 Billion to $14 Trillion (!), and what disaster has this caused? None.
Inflation has averaged close to the Fed’s target of 2.5%. Cutting deficits has led to recessions, which are cured by increased deficits. So exactly what is the problem?
Hence annual deficits and ballooning national debt. This is like government by Groupon: Every year, we’re getting such a great deal, of course we want more and more stuff. We’d be stupid not to.
Yes indeed, we would be stupid not to want more and more stuff. So Messrs., why don’t you want more and more stuff?
Every tax reform promises to either be revenue neutral or to increase the government’s haul.
Gillespie and Krainin want to take more dollars out of your private sector pockets, and give them to the federal government, which being Monetarily Sovereign, doesn’t need or use them.
After years of accumulating debt we need to focus on government spending first and foremost. In 2016, the feds took in about $3 trillion in taxes. That should be the absolute spending limit—instead of the nearly $4 trillion Congress is talking about.
Translation: “After years of accepting deposits in T-security accounts, the federal government needs to cut spending on benefits to the private sector.”
Accepting deposits requires spending cuts?? This makes no sense at all.
Taxes aren’t the price we pay for civilization—they’re the price we pay for government. And until we bind the two together, we’ll be spending more and more money that we don’t have on things we almost certainly wouldn’t want if we had to pay full price for them.
Actually, taxes are the price we pay for monetarily non-sovereign (state and local) government. Taxes do not pay for Monetarily Sovereign (federal) government.
Gillespie and Krainin don’t understand the difference.
This entire article is devoted to the Big Lie, the lie that federal taxes pay for federal spending. It is a lie promulgated by the rich, to reduce the benefits you receive and/or to justify charging you more taxes.
The tax BS just keeps on a’comin.’ There will be more, but at least now, you’ll know what to look and listen for.
Rodger Malcolm Mitchell
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.
Implementation of The Ten Steps To Prosperity can narrow the Gaps:
Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:
Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012
Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.