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Newsletter - Edition #30


05/04/2002

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FOR THE REST OF 2002 - YOU ARE WORKING FOR YOURSELF.

You'll be pleased to know that you are now working for yourself.  Tax freedom day is the day that you have earned enough money in 2002 to pay your federal and state income tax burden.  In Alaska, a state with low state taxes, Tax Freedom Day arrived on April 8th.  We find the highest state taxes in Connecticut, where Tax Freedom Day arrives on May 14th.  On average, tax freedom day was April 27th nationally. 

On the average you work 80 days to pay the cost of the Imperial Federal Government, and another 37 days to pay the cost of state and local governments.  This number does not include the taxes that are paid by businesses and corporations and are hidden in the cost of every single item you buy and service you use.  This tax is computed to be around 20 percent of the cost of these goods and services.

Maybe you would like to download and print the entire report from The Tax Foundation entitled “America Celebrates Tax Freedom Day.”  Click on this link: http://www.fightthebias.com/sr112.pdf

 

MOST PEOPLE DO NOT KNOW HOW MUCH THEY PAY IN TAXES.

Actually, this statement is becoming less and less true as time progresses.  One group that does know how much federal income tax they pay is that segment of wage earners who pay nothing.   By design, this segment is growing larger every year.  I should revise this statement to read “Most people who actually pay federal income taxes have no idea how much they pay.”  If you don’t believe it, just try this little test.  Approach a friend or co-worker whom you actually believe pays some federal income tax and ask them how much they paid.  You will most likely get one of two responses.  For the majority of actual taxpayers, those who are receiving refunds, the response will be “I didn’t have to pay anything!  I’m getting some back!”  For taxpayers who had to write a check today they will quote the amount of that check as the amount of tax they paid.

This is all by design.  Politicians know that if those who actually pay federal income taxes were aware of just how much they were paying there would be an instantaneous and serious tax revolt.  To mask the amount of taxes these wage earners pay, the politicians have sustained the system of withholding those taxes from paychecks.  The money is gone before the wage earner lays their hands on it.  It is as if it the wage earner never had the money to begin with … so, what is to miss?   

IN FACT, MOST PEOPLE DO NOT KNOW HOW MUCH THEY EARN! - NOT TO MENTION HOW MUCH TAX THEY PAY.

OK .. so you have asked your co-worker how much tax they paid in 2001, and they didn’t know.  Now … ask them how much they make!  Those few who will respond will begin their responses with the words, “I take home ……. 

If you wanted to be particularly obnoxious at this point – you could say “I didn’t ask how much you took home.  I asked you how much you made.”  Then … stand by for the blank stare.

This is how well this system of withholding taxes has worked!  The majority of wage earners can’t tell you what they earned!  They are only aware of what they have “taken home.”  It’s as if they viewed their “take home” pay as their total earnings!  It's no wonder people think they haven't paid any taxes when they receive a refund check from the IRS!

I’ll tell you one group that DOES know how much tax they've paid.  The self-employed!  The owners of small businesses – the businesses that employ about 80 percent of the workers in this country … they know.   These are the people who have to sit down four times a year and write a check to the IRS for their quarterly tax payments.  You ask these people how much they paid and they’ll be able to tell you … to the penny!  By the way --- these people make up a minority of  taxpayers, but pay the majority of the taxes. 

WITHHOLDING WAS SUPPOSED TO BE A TEMPORARY MEASURE.

Until World War II taxpayers would write one check to the federal government every year.  The check would be for the tax they owed for the previous year. There wasn't any of this “I didn’t have to pay anything, I’m getting some back” nonsense.  People knew exactly what they paid.

Then comes World War II and the government needs cash to produce ships, airplanes and arms.  So .. how do you speed up the cash flow from the income earners to the government?  Withholding!  You get the employer to take the tax money out of the employee’s paycheck before the employee ever sees it.

Withholding was sold to the American wage earners as purely a temporary measure.  Upon completion of the war things were to return to normal and the wage earner would receive his/her entire check, just as before the war.

The war has been over for about 58 years or so, and withholding is still with us.  Along with the age of withholding came the age of “take-home pay” and tax refunds which brought us the “I didn’t have to pay anything, I’m getting some back” taxpayer.

WOE BE UNTO THE EMPLOYER WHO ATTEMPTS TO FINESSE THE SYSTEM.

Since the advent of tax withholding there have been employers who have tried various payroll gimmicks to make sure that their employees knew just how much they were making and how much was being taken out of their paychecks.  One such gimmick was to issue the entire paycheck to the employee in cash.  The employee would them be required to pay back to the employer the amount of tax due the federal government, as well as the Social Security taxes.  Inevitably, when the feds found about what these employers were trying to do they put a quick end to it. 

Bottom line – politicians know that continued taxpayer ignorance is essential to their continued vote buying schemes. 

OUR FOUNDING FATHERS SPECIFICALLY AVOIDED AN INCOME TAX.

Alexander Hamilton is largely credited with framing those portions of our Constitution that deal with taxes and federal revenue.  Hamilton was definitely not friendly to the idea of an income tax, preferring consumption taxes instead.  Read the following quotation from Hamilton:

"It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. If duties are too high, they lessen the consumption; the collection is eluded; and the product to the Treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens of this class, and is itself a natural limitation of the power of imposing them."

You see the difference between income and consumption taxes here, don’t you?  Under an income tax the only way a citizen can voluntarily reduce his tax load is to stop producing and adding to his own wealth.  Politicians know that many people are unlikely to take this step.  Under a consumption tax you can reduce your tax load, and register your feelings that taxes are too high, by simply reducing or changing your consumption habits.  You can do this without halting or slowing your production of wealth.  Income taxes take almost all of the power away from the taxpayer and vest it with politicians.  Your only weapon is to stop earning income. 

WE FUNCTIONED BEAUTIFULLY WITHOUT AN INCOME TAX FOR MOST OF OUR FIRST 150 YEARS.

That’s about how long it took Hamilton’s ideas to be replaced with the ideas and philosophy of Karl Marx on tax matters.

Karl Marx?  Did I say Karl Marx?  Wait a minute, didn’t he write The Communist Manifesto with Frederick Engels?  Yes, that's him.  He and Engles wrote this guiding document for communism in 1847.  

You can read The Communist Manifesto online here.  It’s long, but buried in the middle you will find ten things that need to be accomplished in an industrialized country to bring on a communist form of government.  Number 2 was “A heavy progressive or graduated income tax.”  No one can argue that this isn’t exactly what we now have in the United States.  Any income tax that puts one-third of the burden on the top one percent of income tax earners and 96 percent of the burden on the top 50 percent fits every definition of "heavily progressive."

It took no time at all for this idea to catch on in the US.  The first income tax was levied in 1862 to help finance the Civil War.  A few years after the war ended the tax was removed and the federal government went back to a consumption based tax system.  In 1895 The Supreme Court ruled an income tax to be unconstitutional.  This little constitutional problem was solved with the 16th Amendment which was ratified in 1913.  Enter the era of Marx and Engles' income tax. 

By the way, before we leave The Communist Manifesto behind, you should know that Number 3 on the list by Marx and Engles was “Abolition of all rights of inheritance.”  Please note the vigilance with which Democrats fight against the elimination of the death tax. 

Oh .. and you should also pay attention to Number 10.  Here you find “Free education for all children in public schools.”  You do know why this was an essential step for the formation of a communist state, don’t you?  These aren’t “public” schools.  They’re government schools.  More accurately, they’re government indoctrination centers.  The little children needed to be indoctrinated into the miracle of communism.

I’ll bet fifty dollars that today in government schools across the nation, teachers are praising our income tax system as a marvelous means to redistribute income from those who earn it (from each according to their ability) to those who are hungry and homeless (to each according to their needs.) 

HOW DID WE MANAGE WITHOUT AN INCOME TAX FOR MOST OF THOSE 150 YEARS?

It's simple.  This was a time when our government was generally operating within its constitutional mandate.

Now just what constitutional mandate would that be?  The one contained in the 10th Amendment to the Constitution --- it reads The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.  If you want to know just what specific powers were delegated to the federal government, look at Section 8 of the Constitution.  Click here if you haven’t read it in a while.

Remember what Hamilton said.  A consumption tax is a limitation on the government’s ability to grow.  Once the consumption tax, which was essentially voluntary, was gone … once it was replaced with an involuntary income tax … the brakes were off.  Today we have a federal government that grows with the passage of every single year … a government that consumes almost 25 percent of all goods and services produced in the United States. 

REMEMBER … ALL TAXES ARE ESSENTIALLY COLLECTED AT THE POINT OF A GUN.

When considering the operation of government and the antics of politicians, do not ever forget that our government has one unique asset that we do not. 

Government can use deadly force to accomplish its goals.  You cannot.

If you want to buy something, and it doesn’t fit within your budget, you will have to either borrow the funds or do something to earn some extra money.  If the politicians to buy something (votes, for instance) they have the power to seize the money from you, with our without your consent.

Do you think this “point of a gun” comment is a little strong?  Yeah … its strong alright, but its also accurate.  If you chose not to pay your taxes the government will levy on your property.  The next step will be for the government to come seize your property in order to sell it.  If you chose to protect your property, to prevent its seizure by government, the guns come out.  It’s that simple. 

THE DIFFERENT WAYS TO ACQUIRE WEALTH.

You can get out there and earn it.  If you do, you are very likely to vote Republican or Libertarian.

If you are government you don’t earn wealth.  You seize it.

If you are a Democratic voter you wait for the government to take that wealth it has seized from the person who earned it, and transfer it to you.

Bottom line … Achievers know that income is earned.  Non-achieving leftists think that income is distributed.

SOON A MINORITY OF WAGE EARNERS WILL PAY ALL OF THE FEDERAL INCOME TAXES.

What is the most certain way, short of using guns, to seize and maintain political power? Easy.  You take money from people who’s votes you do not need and give that money to the people who’s votes you do need.  To rephrase … you take money from those who are unlikely to vote for you, and give that money to those who are likely to vote for you.

Big government leftists (Democrats) have been working this game for decades --- and they are nearing complete success.  The latest figures we have are for 1999, but those figures tell the tale.  In 1999:

  • The top 1% of income earners earned 19% of the total income, but paid over 36% of the total income taxes.
  • The top 5% of income earners earned 34.0% of the income and paid 55.5% of the taxes.
  • The top 10% earned 44.9% of the income, paid 66.5% of the income taxes.
  • The top 25% earned 66.5%.  Paid 83.5%.
  • Top 50%?  Earned 86.3%, paid 96.0%
  • And the bottom 50% … where you’ll find a preponderance of Democratic voters … they earned 13.3% of the income and paid only 4% of the income taxes.

The shift increases every year.  Every time the IRS releases a new set of tax statistics you see that more and more of the burden for the payment of federal income tax is lifted from the majority of wage earners and shifted to the minority of wage earners who make the big bucks.  It doesn’t take a rocket scientist to know where this is taking us --- it’s taking us to a tax tyranny supported by the votes of non-taxpayers.

Now … for those of you who do not believe what I am saying (I would rather you doubt me and research this for yourself then take what I or anyone else says without question) here’s a link so you can study these numbers for yourself.  http://www.taxfoundation.org/prtopincometable.html 

TAXES ARE COMPLICATED.

The tax code contains tens of thousands of pages of rules, law and regulations that no person is capable of understanding.  If you call the IRS for help with filing your return, you may receive a incorrect answer.  This wrong answer can end up costing you big money.  Remember --- you are responsible for wrong answers.  The IRS is not.  

When your grandparents filled out their income tax returns they had two pages of directions to go by.  When you fill yours out you have 122 pages of instructions to follow.  Filling out a tax return is now so complicated that most people have to hire someone to do it.  You might as well consider the money that you pay to your tax preparer as more income taxes.

Now ... just what is the reason why taxes are so complicated?  It's because politicians use the tax code to hand out favors to people they like, to punish people they don't like, and to maneuver people who vote for them into lower tax brackets while maneuvering people who won't vote for them into higher tax brackets.  In addition, politicians also use the tax code to encourage behavior they deem to be good and to discourage behavior they deem to be bad.  Nice system eh? 

Feel better now? 

REMEMBER … You’ve all heard, I’m sure, that you get more of the behavior you reward, and less of the behavior you punish.  So, why punish achievement and reward the opposite?  Because those who desire big government fear the tasks required to achieve and embrace failure. 

 

 

 

There are two methods, or means, and only two, whereby man's needs and desires can be satisfied. One is the production and exchange of wealth; this is the economic means. The other is the uncompensated appropriation of wealth produced by others; this is the political means.
Albert Jay Nock

Taxes are not levied for the benefit of the taxed.
Robert Heinlein 

There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him.
Robert Heinlein 

 

Neil Boortz is a syndicated talk show host based in Atlanta Georgia. You can visit his website at http://www.boortz.com.

Edited by James Bradley

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