In 2019, Tax Freedom Day was 16 April 2019. For those not in the loop, Tax Freedom Day is the day all Federal, State, County, and Local taxes are paid from your paycheck. This date gets further into the new year every year, and with the amount of inflation seen since 16 April 2019, you can bet that Tax Freedom Day will shortly be in the middle of May or July.
What is Paper Money?
Dr. Clarence Carson wrote an article about paper money and the US Constitution, quoted heavily below. Paper Money, “… Paper that was intended to circulate as money but was not redeemable in gold and silver was technically described as bills of credit at the time of the Continental Congress and writing of the US Constitution and US Bill of Rights. The description was (and is) apt. Such Paper is a device for expanding the credit of the issuer.” The credit of the issuer is improved, not the benefit of those forced to use the Paper as credit. Hence, the US Government, to improve its credit, began printing money, and the problems in American Economics took off like a rocket sled on greased rails!
Paper Money only has value when the person holding that Paper has confidence in the government printing that money. In every nation across the globe, the only thing keeping value in the paper currency is confidence in the government by citizens paying taxes. Hence, the problems with depressions, the confidence in value are shaken, and the holders of Paper Money become restless and lack confidence that their money is valuable. Bills of credit, Paper Money conveying the value of debt have been around for a long time, as discussed in a previous article on money. Why did the USSR fall; the currency had been worthless for years, and when the citizens had finally had enough, the government fell apart. A fitting tribute and pattern to be heeded from history if we, the government owners, cannot get the government to cease and desist forthwith!
Government and Paper Money
The US Constitution, as originally written, forbids the US Government from printing paper money why; because of how fast the government abuses this power, creating inflation. The Continental Congress was well aware of government abuses with Paper Money, thus restricting the Federal Government to coinage and tying the value to the gold standard. Inflation is nothing more than a hidden tax, where the government controls how much value your money is worth. Every person using US Dollars to make a purchase pays this tax. Thus, by the time a consumable product has been paid for in a store, that tax, inflation, has been paid multiple times, and the consumer is always worse for every point of inflation the government allows.
Did you know that the Federal Government allows 2% inflation every year as a “target?” Consider this for a moment; the government wants your money and calls this tax a “good thing” for the economy. Thus, your prices for everything increase 2% or $.02 every year because the government wants it to. The 2% devaluation of your money is part of the Federal Reserves’ “Dual-Mandate” to achieve 100% employment and price stability. Do you see any logic in making money less valuable as a means to improve employment and stabilize prices? I don’t! Now, consider this, inflation has hit a this year (2021) and has not stopped climbing. Worse, inflation is expected to continue to grow as the government prints more Paper Money, which will eventually end in a depression preceded by massive deflation of the value of the US Dollar. Keep in mind; inflation has become a global problem, as the majority of governments spent money they did not have during the pandemic. Imagine lemmings racing for a fiscal cliff.
Josiah Quincy wrote George Washington “that there never was a paper pound, a paper dollar, or a paper promise of any kind, that ever yet obtained a general currency but by force or fraud, generally by both.” Yet, Congress still refuses to learn the lessons taught during the Continental Currency. Debts, runaway inflation, legal enforcement to demand paper money be accepted, all of these lessons were experienced by the Founding Fathers, with Rhode Island being the Continental equivalent of California for bad fiscal policy and idiotic fiscal enforcement.
The founding fathers met during an economic period of deflation, which quickly became a severe depression caused by states issuing paper money that was useless. The founders “hoped to erect a system that would endure, and to do that, they wished to guard against the kind of fiscal adventures that produced both unpleasant economic consequences and political turmoil. Paper Money was reckoned to be one of these.” Paper Money, without the backing of silver and gold, has led to speculation, inflation, deflation, cycles of economic depression, and Congress essentially stole the right to print paper money and borrow from the citizens unconstitutionally! This cannot be stressed enough; there is a direct causal relationship between Congressional action, Executive Orders, and the economic problems America is suffering, including the bondage of debts insurmountable and the abuse of tax schemes! All of which were powers strictly limited in the US Constitution because the founders knew the government would abuse the power of Paper Money!
History shows that when paper money was discussed, the states overwhelming voted to remove the power to print money from the US Government, seeing this as the best method for long-term economic success in America. “The vote was overwhelmingly in favor of removing the authority of the United States to emit bills of credit. The delegates voted by state, and 9 states voted in favor of the motion while only 2 opposed it. (New York delegates were not in attendance, and Rhode Island, of course, sent none.) It is a reasonable inference from the discussion that the delegates believed that by voting to strike out the words, (from the Articles of Confederation, which made up the bulk of the US Constitution), they had removed the power from the government to emit bills of credit.” It is important to note that allowing states to issue bills of credit, print their own money, or stamp coinage was also forbidden. To avoid the economic crisis, the founding fathers were in the middle of when framing the US Constitution and the US Bill of Rights from the Articles of Confederation. How many problems, and how much lower would your taxes be if the Federal and State governments had simply followed the law instead of stealing rights and powers from the governed?
Please note, the federal deficit, state deficits, pension crisis, student loan debt crisis, and interest are not included in the numbers quoted below. The following information comes directly from the Tax Foundation (linked above):
- Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work to pay the nation’s tax burden.
- This year, Tax Freedom Day falls on 16 April or 105 days into the year.
- In 2019, Americans will pay $3.4 trillion in federal taxes and $1.8 trillion in state and local taxes for a total bill of over $5.2 trillion, or 29 percent of the nation’s income.
- Americans will collectively spend more on taxes in 2019 than they will on food, clothing, and housing combined.
- If you include annual federal borrowing, representing future taxes owed (interest on the debt), Tax Freedom Day would occur 22 days later, 8 May.
- Tax Freedom Day in 2018 and 2019 was five days earlier than it was in 2017, primarily due to the recent federal tax law, the Tax Cuts, and Jobs Act.
- From 1930 to at least 1995, Tax Freedom Day has taken 1.27 days longer per year to reach. – I do not have an updated reference for this information since 1995.
- In 2019, on average, it took:
- 42 days to pay the income taxes
- 26 days to pay payroll taxes
- 15 days to pay sales and excise taxes, not including surcharges and government fees for services
- 11 days for property taxes – states control this, some municipalities, it took a lot longer
- 5 days for Corporate Income Taxes
- 6 Days for other taxes that always get passed along to the consumer.
I have read economic reports from noted minds in economics that claim had the dollar not been loosed from the ties to the gold standard, America could not have produced the tools needed to win WWII. To which I continue to claim, as Colonel Potter from M*A*S*H so aptly stated, “HORSE HOCKEY! and BULL COOKIES!” Having Congress issuing massive letters of credit, borrowing tremendous sums of money, and the economic fallout remains a millstone about the financial neck of this country. How much longer will Americans pay for debts created during WWII? What about the ever-increasing debt burden and interest that is driving prices and taxes ever upwards?
The US Government has acted improperly since establishing the Department of the Treasury and the Internal Revenue Service. Not just improperly but illegally under the US Constitution as drafted. Illegally, immorally, and unethically towards the founders, and distorted the intent of the US Constitution to protect America from runaway government debt and inflation/deflation/depression cycles common when issuing Paper Money. This is the utter truth, and until this problem is rectified, removing paper money is the right thing to do, even if it means some financial hardship! America can survive financial difficulty; we cannot survive the bondage of runaway debt, interest that sucks all the GDP, and the socialism projects being paid for by tax dollars to buy votes from envious people looking for “equality and fairness.”
© 2021 M. Dave Salisbury
All Rights Reserved
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