THE REAL FUNCTION OF FEDERAL TAXES: PROTECT THE GAP
The central political purpose of taxation in a Monetarily Sovereign nation: Federal taxes are designed to preserve and legitimize the income/wealth gap.
The logic is simple and airtight:
1. The rich are rich only because the rest are not.
Wealth is relative. A billionaire in a room full of billionaires has no special power. What matters is the distance—the gap—between the top and everyone else.
2. The wider the gap, the richer the rich feel and the more powerful they become.
The gap provides: dominance, privilege, control, social deference, political leverage, exclusive accessWealth without a gap is meaningless.
3. The federal government is monetarily sovereign, so it never needs the tax dollars of the rich.
This exposes the con: If the government can create infinite dollars, why does it need yours? Why do benefits have to be rationed? Why do programs have to be “paid for”? Why is every social improvement met with the question, “How will we fund it?”
4. The pretense of federal money scarcity is a deliberate political construct.
It is used to justify: cutting Social Security, blocking Medicare for All, restricting public services, denying tuition assistance, suppressing wages, and starving the working class under the myth of “We can’t afford it.”
5. By pretending federal dollars are scarce, the wealthy block benefits for everyone else.
This is exactly the mechanism that widens the gap. If everyone had good healthcare, good education, and adequate income, the rich lose the main thing that defines them—the distance.
6. Taxes on the rich are not needed for revenue—they are needed to preserve the illusion of fairness. Symbolic.The system pretends to “tax the rich” to make the public believe the system is equitable, while simultaneously allowing loopholes, permitting massive avoidance, eliminating audits, designing exemptions, all to protect the very people who created the tax code.
7. The bottom line: Federal taxes are the single most effective political tool for maintaining the wealth hierarchy in an economy where the government cannot run out of its own currency.
I wonder whether ChatGPT says it to everyone, or if it’s taking its cues from me. You might want to try asking it this question: “What are the purposes of Federal taxes? and see if you get the same answers.
Let me know. I’m curious about this aspect of ChatGPT.
The current Supreme Court is a politically motivated gang more interested in advancing a royal agenda than examining the obvious results of that agenda.
The Unitary Executive Theory of the Supreme Court.
The right-wing members of the court, also known as the Republican members, hold a solid 6-3 majority. They have voted to grant the currently Republican President powers akin to those of a king.
I will refrain from speculating on whether they would have taken the same action for a Democratic President, but I can say with certainty that this decision is entirely rooted in Republican politics, particularly the MAGA movement.
SCOTUS has adopted what is known as the “Unitary Executive Theory,” which holds that the President must have complete control over the entire executive branch.
This means, all executive poweris vested in one person: the President. All executive officers (Attorney General, DOJ, FBI, CIA, cabinet secretaries, agencies) are entirely subordinate to him.
No part of the executive branch can operate independently of Presidential direction. The doctrine is based on an interpretation of Article II of the Constitution: “The executive Power shall be vested in a President of the United States of America.”
It is doubtful that the original founders, having experienced and hated being ruled by a king, would intentionally have created a Constitution that gave someone kinglike powers. Nevertheless, that is the assumption of the six right-wing justices.
The reason (excuse) for this SCOTUS ruling was “The ordinary checks of the criminal or civil law cannot apply to the president while in office, because lawsuits and prosecutions would unacceptably distract him from his constitutional responsibilities.”
All forty-six previous Presidents, including Trump himself, managed to avoid being unduly distracted by lawsuits and prosecutions. Perhaps it took a notably criminal President to bring this possibility to light.
It started with Antonin Scalia, who stated that all executive power is vested in the President, independent prosecutors are unconstitutional, and fragmented executive authority undermines accountability. This perspective is rare, considering our historical relationship with the British crown.
By the mid-2000s, Scalia was joined by Thomas and Alito in supporting the notion that America should be ruled by a king.
Is this what they fought and died for?
In 2008, Chief Justice John Roberts joined the group, and shortly thereafter, Kavanaugh, Gorsuch and Barrett rounded out the six king-makers.
Their recent presidential immunity decision (Trump v. United States) implicitly states that the President is immune from any prosecution for “an official act”:
The President can fire any executive-branch official at will.
Can order the DOJ, the FBI, U.S. Marshals, and all other federal law enforcement to arrest anyone, even a member of Congress (or SCOTUS), who does not vote in agreement with the President’s decisions.
The President can order a federal judge to find someone guilty and sentence them to jail.
No independence for agency heads, prosecutors, or regulators.
The President can direct the DOJ, FBI, and federal prosecutors however he wants.
Congress cannot limit the president’s control over executive agencies.
Even if the order is illegal, corrupt, or tyrannical, it is still an official use of executive-branch authority. He can violate the Constitution and still be immune from criminal prosecution if the act is an official one.
The Court explicitly said the judiciary may not examine the motives behind official acts, so even if the arrest order was retaliatory, abusive, election interference, or blatantly fascist, the king (sorry, the President) can do it without fear of criminal consequences.
The agents who carry out the arrests could potentially be prosecuted, but the president himself would be shielded. Of course, the king could pardon those agents, as Trump already has demonstrated with his pardons of the January 6th traitors.who tried to overthrow the government.
Ordering the arrest of legislators or judges for political reasons is an “official act” using core executive-branch authority. The president would have absolute criminal immunity.
He could not be prosecuted, even though the order is tyrannical, anti-constitutional, more characteristic of authoritarian regimes, and a direct attack on the separation of powers. This is exactly the kind of abuse critics warned about, and the majority opinion did nothing to carve it out.
Consider what King Donald could do:
I. He could try to dissolve Congress, arrest members, block access, or prevent it from meeting; he would be criminally immune. Under the Court’s logic, directing federal law enforcement is a core executive power. His motive cannot be examined, and his criminal prosecution for his official acts is barred.
The only solution would be for Congress to impeach him, provided they can convene and that Republicans would support it. Alternatively, the courts could issue injunctions, assuming he would comply with them. The military could also refuse his unlawful orders, assuming he hasn’t already dismissed those with integrity.
But no criminal prosecution for him.
II. He could ignore or order the states to ignore SCOTUS rulings. Although the President has no authority over state governments (yet), he could federal executive power to pressure, coerce, or assist states in disobedience.
III. He could jail journalists who criticize him or his administration in any way. Though this would violate the First Amendment (due process and press freedom) he still could order the arrest of journalists. His motives cannot be questioned, and criminal prosecution of the president would be barred.
The Court explicitly said even abusive or “nefarious” uses of official power are immune.
IV. The president has the authority to use military force domestically by following established legal processes, such as the Insurrection Act. However, he could also deploy the military without statutory authorization, which would be considered an abuse of power. This action would violate the Posse Comitatus Act and the Constitution. Moreover, the president’s decision in this regard would be immune from criminal prosecution.
Military officers are legally obligated to refuse illegal orders and soldiers can be court-martialed for following unlawful commands. (You’ll notice the recent right-wing “hang ’em” response to someone even mentioning that legal possibility.)
Though the Constitution still forbids authoritarian actions, the criminal law can no longer restrain a president who commits them using executive power.
The only remaining checks are: impeachment, elections, military refusal, civil suits, injunctions, or political resistance.
The problem is time. An amoral monster like Trump can do so many otherwise prohibited things, and even in the unlikely even that a spineless Republican Party, or a criminal SCOTUS voted against him, these things take time, and time itself can be punishment.
ICE mis‑detained a U.S. citizen, who was imprisoned for 1,273 days got a damages award — but the appeals court later denied compensation because the claim was filed too late. Federal lawsuits against ICE or DHS are often difficult; there are narrow pathways, and courts have sometimes dismissed claims even when civil rights violations seem obvious.
Even after proving citizenship, many detainees remain jailed for days or weeks before release. That delay, trauma, lost wages, and reputational damage may not be fully compensated or acknowledged.
Many suits end in dismissals or settlements that fall far short of real justice (and no criminal liability for the officers/agency).
In short, any given power tends to use that power. An amoral person given kinglike power absolutely will use that power amorally.
The founders tried to anticipate a tyrant, but clearly failed to anticipate a psychopath like Donald Trump with the support of the spineless and suicidal Republican Party.
Only one question remains: Is America lethargic enough, or bigoted enough, or just plain stupid enough to vote for the slavery that the current Supreme Court has countenanced?
Economics is filled with myths that might make one think it is taught at Hogwarts School of Witchcraft and Wizardry. A discipline that loves to use statistics often seems to disregard them in favor of intuition and confused semantics.
Monetary Sovereignty is the historical truth that the federal government created the first dollars from thin air through legislation. The government retains the unlimited authority to continue passing lawsand those laws can produce as many dollars as the government desires for any purpose it chooses.
Gap Psychology suggests that the terms “rich” and “poor” are relative. To become richer, one must widen the gap in income, wealth, and power below, while narrowing the gap above. This can be achieved either by increasing one’s own earnings or by reducing others’ earnings.
Currently, the federal government creates dollars by this process:
Congress votes to fund something.
The President approves
Computer keys are pressed
The money is credited to the appropriate accounts.
This means the federal government, being Monetarily Sovereign:
Cannot run short of dollars.
Cannot become insolvent or go bankrupt
Does not need to, and indeed does not, borrow dollars.
Neither needs nor uses tax dollars to pay its obligations
Due to the monetary non-sovereignty of state and city governments, businesses, and individuals, there are many misunderstandings and myths about federal finances.
Federal “debt.” It isn’t what most people know as “debt.” The federal government is not “in debt.” It does not borrow. It does not owe. It merely accepts deposits into U.S. Treasury savings accounts.
Those deposits are owned by the depositor, not by the government. To pay off the “debt,” the government returns the deposits plus interest. Federal taxes and taxpayers are not involved in any way.
The purpose of those accounts is not to provide the government with funds for spending. Instead, those accounts:
Assist the Federal Reserve in managing interest rates by establishing a “base” rate.
Provide a secure location for unused dollars to stabilize and enhance their value.
Here are the most common myths about T-securities deposits (aka “debt”).
1. “The debt is a burden on future generations.” Future generations are not responsible for repaying past federal debt. When Treasury securities are bought, the purchaser deposits dollars into their T-security account. Upon maturity of those securities, the buyer is paid with the dollars in that account. Future tax dollars are not involved in this process.
Future generations will benefit from the government’s interest payments.
2. “The federal government could become insolvent.” Many people believe federal finances resemble a family budget. This comparison is intuitively appealing and for some, politically advantageous.
A monetarily sovereign government creates all the currency it owes. It cannot run out of dollars any more than a scorekeeper runs out of points. It can generate the dollars required to fulfill any obligation.
3. “China ‘owns’ us and can demand repayment.” China holds U.S. Treasuries because it seeks a secure way to save in dollars. It does not have the power to make demands regarding these securities. Repayment occurs only at maturity and involves an electronic transfer from China’s T-security account at the Federal Reserve to other Chinese accounts at the same
4. “Interest will crowd out federal programs.” Paying interest simply credits bank accounts. It doesn’t deplete federal funds; the government creates the funds it pays out. Additionally, paying interest generates dollars for economic growth. Even if the government paid trillions of dollars in interest, it would not affect the government’s ability to fund its programs — not by one penny.
5. “High debt causes inflation.” Federal debt differs from personal debt. It is created when dollars are accepted into Treasury accounts, which are settled at maturity simply by returning those dollars. Inflation is related to resource shortages, not to federal debt.
There is no relationship between federal debt (red) and inflation (green). The peaks and valleys of the two lines differ substantially.
6. “High debt raises interest rates.” The Federal Reserve sets interest rates arbitrarily. Since the federal government does not have a financial need to accept T-security deposits, the demand for these investments does not influence interest rates.
The peaks and valleys of interest rate changes (gold) do not match those of federal debt, indicating that interest rate changes are not associated with changes in federal debt. One even could argue that increases in federal debt lead to lower interest rates.
7. “Our grandchildren will be saddled with the debt.” Every dollar of debt corresponds to a dollar of someone’s savings. Future generations will own both the Treasuries and the interest dollars used to service them. There is no intergenerational burden. The “debt” is not a taxpayer liability.
Here are the lowest and highest ratios. By analyzing these ratios, could you determine which nations you would prefer to lend to? Which nations are strongest financially? Which nations are least likely to default?
You can’t, because the Debt/GDP ratio is meaningless.
There is no relationship between the Debt/GDP ratio and financial strength.
9. “Large debt hurts economic growth.” Higher government debt correlates with stronger GDP growth because federal deficits and interest payments add growth dollars to the economy.
The following graph illustrates the parallel paths of Gross Domestic Product and Federal Debt. This parallelism is not coincidental. The most crucial equation in economics is GDP = Federal Spending + Nonfederal Spending + Net Exports. Federal spending adds dollars to the private sector and is necessary for economic growth.
Federal expenditures and GDP move essentially in parallel.
10. “We must reduce debt so interest payments don’t explode.” Interest payments act as a fiscal stimulus by adding growth funds to the private sector. When interest payments increase, private income also rises.
Our government, as a monetarily sovereign entity, easily manages any level of interest payments.
Interest rates (yellow, dashed line) and GDP (blue) rise and fall together.
11. “It’s irresponsible to let debt grow forever.” The federal debt is the difference between federal spending and revenue. Thus, debt adds growth capital to the economy, allowing for continuous economic growth, which is beneficial.
12. “Eventually, no one will buy our debt.” The Federal Reserve and primary dealers are obligated to purchase Treasury securities; however, the federal government has no financial need for anyone to buy its debt.
The purpose of federal debt is not to provide spending funds to the government. T-securities provide dollar users with a safe place to store unused dollars. The dollar-using world wants the insurance that T-securities provide.
13. “High deficits mean higher taxes later.” Federal taxes do not pay for the federal debt. Instead, the Treasury creates new dollars to cover the interest, and each debt account is settled at maturity by returning the dollars in that account.
Tax rates: The Highest bracket (green dashed line) and the lowest bracket (blue dashed line) are compared with annual changes in federal deficit spending (red). Tax rates have fallen as deficit spending has increased.
14. “We should have a balanced budget.” This means the federal government would not provide additional funds to the economy, which would result in a depression.
Paying down the debt requires running surpluses, which historically have led to depressions. Throughout U.S. history, every depression has been preceded by federal surpluses.
1804-1812: U. S. Federal Debt reduced 48%. Depression began in 1807. 1817-1821: U. S. Federal Debt reduced 29%. Depression began in 1819. 1823-1836: U. S. Federal Debt reduced 99%. Depression began in 1837. 1852-1857: U. S. Federal Debt reduced 59%. Depression began in 1857. 1867-1873: U. S. Federal Debt reduced 27%. Depression began in 1873. 1880-1893: U. S. Federal Debt reduced 57%. Depression began in 1893. 1920-1930: U. S. Federal Debt reduced 36%. Depression began in 1929. 1997-2001: U. S. Federal Debt reduced 15%. The recession began in 2001.
When federal deficit spending decreases, recessions tend to occur, which are resolved by increasing federal deficit spending. See the following graph:
Every recession (vertical gray bars) followed a decline in federal deficit spending, and all were cured by an increase in deficit spending.
15. “The federal debt is not sustainable.” This is a non-specific false claim encompassing all of the other false claims about federal debt. The term “sustainable” frequently is used by individuals opposed to debt and leaning toward Libertarian views.
However, they seldom clarify why a Monetarily Sovereign nation cannot “sustain” any level of debt, especially when the situation in question isn’t even a debt. (It’s deposits.)
And all the false claims boil down to the one underlying false claim:
16. The government and taxpayers cannot afford Medicare for All, Social Security for all, housing assistance, food assistance, or any other benefits for the middle class and the poor.The federal government, being Monetarily Sovereign, can afford anything without needing taxpayer funds.
Despite the fact that tax loopholes for the wealthy cost the government money, Congress and the President rarely oppose them. The reason: wealthy people are major campaign contributors.
Given this situation, why is Washington hesitant to provide those benefits? Why do we have “debt ceilings” and government shutdown battles over spending?
The answer: Gap Psychology.
The very wealthy still want to become wealthier. It is human nature. To become wealthier, one must widen the income/wealth/power Gap below and narrow it above.
To do that, one must increase one’s own income or decrease the income of others. The rich do both by bribing the most important information sources:
They bribe politicians via campaign contributions and lucrative jobs in “think tanks.”
They bribe economists via university endowments and promises of lucrative jobs and assignments
They bribe the media via advertising dollars and outright ownership
All are expected to promulgate the myths about federal debt so as to reduce or eliminate entirely spending for social services.
That is why it is said that the Social Security and Medicare trust funds are running out of money, when in reality, there are no actual trust funds, and the necessary funds would be available if Congress simply voted for them.
It is why Congress forces the states to fund social programs, knowing that the states are monetarily non-sovereign and often unable to fund programs properly.
SUMMARY
The federal “debt” is not real debt in the traditional sense. It refers to deposits that are essentially repaid by returning them. This process does not impact taxpayers.
The federal government, as a monetarily sovereign entity, does not borrow dollars. Instead, the purpose of this so-called debt (or deposits) is to help the Federal Reserve manage interest rates and provide a safe option for unused dollars, thereby protecting dollar users.
In summary, the federal debt does not threaten the federal government’s solvency nor hinder economic growth. In fact, it serves the opposite purpose.
You may have heard about the “law and order” Republican outrage when some Democratic politicians reminded service members that they could refuse to obey illegal orders.
All six of the lawmakers—Sen. Mark Kelly of Arizona, Sen. Elissa Slotkin of Michigan, Rep. Jason Crow of Colorado, Rep. Chrissy Houlahan of Pennsylvania, Rep. Maggie Goodlander of New Hampshire, and Rep. Chris Deluzio of Pennsylvania—either served in the military or in national security positions before they were elected to office.
In a video they shared last week, they reminded members of the military and intelligence community that they “can refuse illegal orders” and that “no one has to carry out orders that violate the law or our Constitution.”
The Republicans claimed that the warnings amounted to treason.
In contrast, they do not view the events of January 6 as treasonous.
While the Democrats’ comments, which were sound legal advice and did not lead to any injuries,many people were physically harmed during the January 6 riots.
The actions taken that day were so severe that Trump denied having encouragedanyone to attack the Capitol.
Nevertheless, Trump pardoned every one of the rioters, no matter the severity of their actions, while the Democrats who merely quoted the law are being investigated.
We should remember that had Hitler’s minions refused his orders to murder innocents in gas chambers, millions of lives might have been spared.
I asked ChatGPT about injuries during the insurrection. Here is the response:
Publicly Documented January 6 Injuries (Named Individuals)
Name
Agency / Role
Injuries (Known/Public)
Long-Term / Notes
Aquilino Gonell
U.S. Capitol Police (USCP)
Beaten with a flagpole; crushed in a doorway; chemical spray; hit with a speaker; hand lacerations
Surgery on right foot; likely shoulder surgery; ongoing trauma/PTSD
PTSD: long-term neurological and psychological effects
Daniel Hodges
MPD
Crushed in doorway; head bashed by removal of gas mask; chemical spray; concussion
Psychological trauma; continued public testimony
Caroline Edwards
USCP
Hit by a bike rack, thrown back onto a handrail, suffered a skull fracture, concussion, and lost consciousness
Returned to fight after injury; chronic effects
Brian D. Sicknick (died next day)
USCP
Pepper-spray exposure; physical confrontation
Death ruled “natural causes” (strokes), following riot involvement
Unnamed Officer #1
USCP (reported in Senate doc)
Two cracked ribs, two smashed spinal discs
Career-threatening injury
Unnamed Officer #2
USCP
Eye injury was severe enough that he was “going to lose his eye.”
Outcome unclear publicly
Unnamed Officer #3
USCP
Loss of fingertip (tip torn off)
Permanent disfigurement
Unnamed Officer #4
MPD
Stabbed with a metal fence stake
Serious but recoverable
Unnamed MPD female officer
MPD
Hit in the head with bats/poles/pipes; concussion; knocked unconscious
Off duty for recovery
Various officers (≈140 total)
USCP + MPD
Bruises, lacerations, chemical burns, head trauma, fractures, concussions, sprains, contusions
A number remained on medical leave for months
Notes on completeness
The table above includes all named individuals whose injuries are verifiable in public testimony, court filings, congressional reports, or major news sources.
The remaining ~135 or so injured officers are not publicly named and appear only as aggregated totals.
There is no public list of rioters injured (other than deaths), because injuries to rioters were not tracked, and private medical info is not released.
During the Nuremberg Trials, many Germans convicted of war crimes argued that they were “just following orders,” a claim that may have been true in some instances.
However, following illegal orders does not absolve individuals of responsibility for their actions.
According to The Uniform Code of Military Justice (UCMJ) a soldier is not only allowed to refuse an illegal order — he is legally obligated to refuse it.
U.S. military doctrine (e.g., Army Regulation 190-14, FM 27-10) explicitly state that troops have a duty to disobey unlawful commands.
An order is unlawful if it violates U.S. law, the UCMJ, the Constitution, or the Geneva Conventions, directs a war crime, violates rules of engagement, is not related to a legitimate military purpose, or requires immoral or criminal conduct.
If a soldier follows an illegal order, he may face criminal liability for any resulting offense, even if it was ordered.
If a soldier believes an order is illegal, he may be punished for disobedience (Article 92) unless his belief is reasonable. The soldier should seek clarification when the legality is uncertain.
There is no law against telling a soldier to “disobey illegal orders,” as this statement merely reiterates the soldier’s legal duty. It does not constitute incitement, unlawful influence, or insubordination; it is simply a reflection of what U.S. military law already mandates.
So, if any Democrats are charged with the crime of treason or sedition, it is highly likely that nearly all judges, with the possible exception of Trump’s favorite judge, Aileen Cannon, will dismiss these frivolous cases.
#Monetary Sovereignty - Mitchell 