The Proper and Improper Role of Government: Chapter 4 – Tax Freedom Day – Do you know why this is important?

Working DollarIn 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!Plato 2

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.

IronyDid 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.

Lemmings 5Josiah 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.Tax Scheme 2

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!Bait & Switch 2

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?

Facts About Tax Freedom Day

IRSPlease 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.

Tax BurdenI 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?

Knowledge Check!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
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.

NO MORE BS: The Power and Blessing of Conflict

Douglas Malloch wrote a poem that has become famous.  More to the point, the poem “Good Timber” declares a natural law, “Conflict is Good!

Good TimberGood Timber
by Douglas Malloch

The tree that never had to fight
For sun and sky and air and light,
But stood out in the open plain
And always got its share of rain,
Never became a forest king
But lived and died a scrubby thing
.

The man who never had to toil
To gain and farm his patch of soil,
Who never had to win his share
Of sun and sky and light and air,
Never became a manly man
But lived and died as he began
.

Good timber does not grow with ease:
The stronger wind, the stronger trees;
The further sky, the greater length;
The more the storm, the more the strength.
By sun and cold, by rain and snow,
In trees and men good timbers grow
.

Where thickest lies the forest growth,
We find the patriarchs of both.
And they hold counsel with the stars
Whose broken branches show the scars
Of many winds and much of strife.
This is the common law of life
.

I learned to swim by being thrown into the deep end of a lake and told to get back to shore on my own.  The conflict made me understand and learn how to coordinate movement, and I learned to swim.  I learned how to fight by opening my big mouth and having someone bigger close my mouth for me.  I learned how to ride a bike by falling off.  As a process of learning and developing, conflict has been the driving factor in all of our lives.  But, as soon as a person is elected to public office, they seem to lose their minds and think conflict is always bad, to be avoided, and scared of due to the perceived consequences.

ToolsConflict is a tool, and like all tools, when used appropriately, it can build, enhance, strengthen, and create.  Whereas, if the tool is improperly used, destruction, damage, and chaos are spawned.  Conflict happens; what a person chooses to do with that conflict and how that person considers conflicting occurrences is how the labels “good,” “bad,” “valuable,” “beneficial,” etc., are applied.  McShane and Von Gilnow (2004, p. 390) postulated, “conflict as beneficial [when] intergroup conflict improves team dynamics, increase cohesiveness, and task orientation. … [C]onditions of moderate conflict, motivates team members to work more efficiently toward goals increasing productivity.”  The sentiment regarding conflict as a tool and beneficial is echoed throughout the research of Jehn (1995).  Jehn (1995) reflected that the groups researched labeled the conflict as beneficial, good, bad, etc. Based on the group’s dynamics and the conflicts faced and settled, the groups formed an integrated model for organizational conflict.  Essentially, how the conflict is approached and used by the team members individually and collectively dictates how beneficial the conflict is for the team and the organization.

Rao (2017) built upon previous researchers’ shoulders, perceiving conflict being a tool, and provided vital strategies for leaders to employ if they choose to minimize conflict.  Rao (2017) provided that conflict builds character, whereas crisis defines character” [p. 93].  Rao (2017) recognized that conflict labels are an individual choice.  In organizational conflict, one team could label the conflict as useful and beneficial while another department could label that same conflict as damaging and horrible.  When the conflict in an organization has disparate labels, understanding why conflict is disparately evaluated remains more important than changing the label.

moral-valuesThompson (2008) raised significant points regarding conflict, beginning with a real-life example of how conflict spurred organizational change and growth for the H. J. Heinz Co.  Thompson (2008) calls those who actively work to avoid conflict as those taking “trips to Abilene;” included in those making trips to Abilene are those who take conflict personally and choose to become offended, as well as those who choose to not see conflict as a method of ignoring conflict.  Thomas (1992) captured again how individual choices about the valuation of conflict opens or closes the door to the productive use of conflict.  Ignoring conflict, avoiding conflict, and other strategies of not facing conflict form the most dangerous people to be around, for when conflict grows beyond a point where it can no longer be ignored or avoided, that is the conflict that can destroy people, places, and things.

Thomas (1992) echoes Jehn (1995), Lencioni (2002), and Thompson (2008) in declaring the distinction between conflict as a process and the structure in which the conflict process occurred is critical to how beneficial the conflict will be for the team, business, or society.  Consider for a moment, the structure in the organizational environment.  Conflict is the mental thinking, adherence to operating procedures, and individuals working become the instigating factor, which is a threat to what is known or done at the current time.  Hence, Thomas (1992) provided a keen insight into conflict as a tool, purposeful initiation of a process (conflict) to improve a structure (organizational environment).

When people recognize the power of conflict and purposefully employ conflict, everyone receives the potential to improve through conflict (Lencioni, 2002).  Thus, conflict continues to be a tool, nothing more and nothing less.  The disparities between organizational conflict labels are critical to understanding the chasm between teams evaluating conflict as the process and business structure. The gap in understanding conflict’s results can create inhibitions to future organizational conflict, create unneeded additional conflict processes, all while undermining the organizational structure.

Andragogy - LEARNWhy does this matter?

The media keeps postulating that the slim margins between Republicans and Democrats in the US House of Representatives and Senate are bad, and chaos will reign in conflicting opinions. I’m afraid I have to disagree with the media and wanted a common understanding of conflict’s beneficial nature before expressing why conflict in the US House of Representatives and Senate is desirable.  From the earliest days of the Continental Congress, America has been born from meeting a shared understanding born from two extreme positions.  Early conflicts in American history led to the need for laws to stop dueling with guns and swords.

There are many valuable lessons to be learned from conflict critical to America’s future.  For example, had America had more conflict in the US Congress (Senate and House), we would have a budget and less debt.  Consider some of the detestable legislation pushed through at the end of 2020 and the 116th Congressional session.  With more conflicting ideas and opinions, building strong voices in dissent, those pieces of legislation would have been pushed onto a new Congress for remediation and reconciliation.

Mount RushmorePresident Lincoln is known as a great leader of America in crisis, a reputation justly earned!  Guess what, he had a very contentious Congress to face. Through the Congressional contention, conflict, and remediation and reconciliation processes, Congress had to learn to work together under the rule of law.  As a point of interest, all the presidents honored on Mount Rushmore had crisis, contention, and Congressional conflict to overcome and achieve American progress.  Why do we need more conflicting opinions, slimmer margins, and maybe a few more different and diverse political parties in America’s Congress, because they refuse to listen to the electorate!

I have seen Congressional bodies in several Democratic countries during my travels, and I keep watching how other countries’ Congressional bodies work and do not work.  Frankly, I would not mind seeing a fistfight or two break out in the US Congress as a way to shatter the current paradigm and get the legislative bodies working as they should, moving between two extreme points to find the best solution for the people who hired them.  People claim politics is a rough game; I say, bring on the conflict and make that job rougher in the hopes of improving performance!

References:
The references are included if you want to further research conflict as beneficial.

Amason, A. C. (1996). Distinguishing the effects of functional and dysfunctional conflict on strategic decision making: Resolving a paradox for top management teams. Academy of Management Journal, 39(1), 123-148. doi:http://dx.doi.org.contentproxy.phoenix.edu/10.2307/256633

Baron, R. A. (1991). Positive Effects of Conflict: A Cognitive Perspective. Employee Responsibilities & Rights Journal, 4(1), 25-36.

Brazzel, M. (2003). Chapter XIII: Diversity conflict and diversity conflict management. In D. L. Plummer (Ed.), Handbook of diversity management: Beyond awareness to competency based learning (pp. 363-406). Lanham, MD: University Press of America, Inc.

Du, F., Erkens, D. H., & Xu, K. (2018). How trust in subordinates affects service quality: Evidence from a large property management firm. Business.Illinois.edu. Retrieved from https://business.illinois.edu/accountancy/wp-content/uploads/sites/12/2018/03/Managerial-Symposium-2018-Session-IV-Du-Erkens-and-Xu.pdf

Jehn, K. A. (1995). A multi-method exanimation of the benefits and detriments of intragroup conflict. Administrative Science Quarterly, 40, 256-282.

Lencioni, P. (2002). The five dysfunctions of a team: A leadership fable. Hoboken, NJ. John Wiley & Sons. 

Lumineau, F., Eckerd, S., & Handley, S. (2015). Inter-organizational conflicts. Journal of Strategic Contracting and Negotiation, 1(1), 42-64. doi:10.1177/2055563614568493 

McShane, S. L., & Von Gilnow, M. A. (2004). Organizational Behavior, Third Edition. Boston: McGraw-Hill Companies.

Moeller, C., & Kwantes, C. T. (2015). Too Much of a Good Thing? Emotional Intelligence and Interpersonal Conflict Behaviors. Journal of Social Psychology, 155(4), 314-324. doi:10.1080/00224545.2015.1007029 

Rao, M. (2017). Tools and techniques to resolve organizational conflicts amicably. Industrial and Commercial Training, 49(2), 93-97. doi:10.1108/ict-05-2016-0030

Thomas, K. W. (1992). Conflict and conflict management: Reflections and update. Journal of Organizational Behavior, 13(3), 265-274.

Thompson, L. L. (2008). Chapter 8: Conflict in teams – Leveraging differences to create opportunity. In Making the team: A guide for managers (3rd ed., pp. 201-220). Upper Saddle River, NJ: Prentice-Hall.

© Copyright 2021 – M. Dave Salisbury
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