“I’M A TAXPAYER,
MAN”
MAYBE, BUT…
(By Stevan Douglas
Looney, JD)
When somebody says that s/he is a “taxpayer,” typically s/he
means that the taxes on our “incomes” from whatever source derived, and that
are assessed and collected by the national and state governments, are used to
pay for the various expenses and “essential services” provided, or so
graciously bestowed upon some of us by government (the take from Peter to pay
Paul paradigm); and that, therefore, s/he is entitled to advance an opinion and
to take a stand on some issue or other.
When a person uses that term, or one like it, s/he also expects the
politicians to listen and take heed.
When I hear this common refrain I shake my head.
To be fair, although I have never used this term, except in
jest or as an exaggeration to make a point, as recently as about four years ago
I would not have thought to question the core meaning and intent of this
exhortation. Speaking just of the
federal income tax for purposes of this essay, and in order to simplify the
topic without in any way detracting from the accuracy of what I am setting
forth herein, when someone makes that statement in a serious way, s/he
sincerely believes that his or her income taxes are going to pay for the
expenses necessary to operate the national government and to provide for we,
the people. This commonly held belief,
however, is not true. It has not been
true for quite some time. And, with each
passing session of Congress and each election cycle, it becomes less and less
true, or more and more false; depending perhaps on whether you like to look at
the glass as half full or half empty.
To illustrate the point, I would like to share some facts
with you; facts that you may find startling and which may give rise to cause
for concern. At a minimum, I hope it
will give you cause for further research and investigation into these
critically important issues; followed by appropriate lawful action.
Fact No. 1: Very
little, if any, of the taxes that you pay to the national government on your
income (assuming you pay any income tax) is used to pay for the expenses and
services that our national government ostensibly provides to we, the people.
Fact No. 2: Most,
if not all, of the money, so-called, that the national government, i. e.,
Congress, appropriates and then uses to pay for the expenses of government is
borrowed from central banks, principally from the Federal Reserve.
Fact No. 3: All
“money”, i.e., Federal Reserve notes (those pieces of paper in your wallet,
purse, pocket, or under your mattress), coins (those clad sandwich copper alloy
things), and “weightless photons in the electromagnetic ether” (computer or
electronic money) in existence, exists because someone (including business
entities), somewhere, at sometime borrowed the “money” and still owes it to a
central bank. This process is often
referred to as “monetizing the debt,” but is more commonly known as credit. (At
its core, credit is our ability and willingness to repay debt, which lenders
measure by credit scores and other ratings.)
All such “money” is debt-based.
In January 1934, Congress terminated the right and ability to redeem
“money” for gold. Since 1933-34, no one
in the US has
been able to “pay” a debt, we have only been able to “discharge” a debt by
passing the debt from one holder of the “money” (say, you) to another holder of
the “money” (say, me).
Fact No. 4: Most,
if not all, of the “money” that is collect by the IRS, paid to the U.S.
Treasury and handed over to the US government in the form of income taxes, is
applied to the interest, but not the principal, on the “money” that was
borrowed from the central banks; again, principally the Federal Reserve, which
is the central bank for the U.S. After
deducting its expenses and administrative costs, the Federal Reserve remits to
the U.S.
government the balance of the “money” that was paid towards the interest. The Federal Reserve is a private bank, not a
government agency, and it receives many billions of dollars annually from U.S.
citizens and non-citizens.
Fact No. 5: The
national debt as of July 2007 is 8.9 trillion dollars and rising. The interest on the national debt for fiscal
year 2006 has been reported to be 245 billion dollars. (It is probably closer to 500 billion
dollars.) Congress has raised the debt
ceiling from 3 trillion dollars, to 6 trillion dollars, to 9 trillion
dollars. That is, Congress has
authorized the national government to borrow up to 9 trillion dollars. (Given that the 9 trillion dollar mark has
almost been reached, it is a sure bet that Congress will soon raise the debt
ceiling another 3 trillion or so.)
Fact No. 6: We,
the people, have been saddled by Congress, the Executive, the Judiciary, and
the central banks with the burden of paying, rather, discharging, the national debt.
Fact No. 7: We,
the people, will never be able to pay/discharge even the interest on the
national debt, let alone any of the principal.
(Whether this debt can or should be forgiven invokes interesting and
difficult issues.)
Fact No. 8: Congress,
the Executive, the Judiciary and the central bankers know (and probably intend,
see Fact No. 9) that we, the people, will never be able to pay/discharge the
national debt.
Fact No. 9: If
the principal and interest on the national debt (and all debt issued from a
central bank, whether private or public debt) were some how paid, discharged or
forgiven by the central banks that created (yes, created) and lent the “money,”
the supply of “money” would be reduced by that very same amount. This is so, because, for every dollar of
debt-based “money” paid to, or discharged or forgiven by, a central bank, one
dollar of “money” is extinguished on the so-called books of the bank(s) and
that “money”, thus, ceases to exist.
(The process just described is the reciprocal of how “money” comes into
existence. That is, for every dollar of
debt-based “money” lent by a central bank, one dollar of “money” is created by
entries on the books and records of the bank, in some manner of credit and
debit bookkeeping, and that “money,” thus, comes into existence.) The event or process of reducing the money
supply below a certain threshold would, in turn, trigger an economic depression
to one degree or another. The more “money”
that is taken out of circulation, the more severe would be the depression. This is one reason why politicians and
central bankers will only occasionally willingly allow significant portions of
the debt to be repaid, discharged and/or forgiven, and will usually continue to
cause the debt to grow, or at least not fall below a certain level—unless and
until they want a depression--as they have done in the past. Economic depressions do not just happen due
to invisible and unknown economic forces, they are
planned and created by the intentional contraction of the “money” supply. (Concerning the past, 1913 is a very, very
important year in the area of monetary policy and taxation in the U.S. Among other things, the Federal Reserve
System was established in 1913, as was the federal income tax through the
ostensible ratification of the 16th amendment to the U.S.
Constitution. It is no coincidence that
these two events occurred in the same year.)
Fact No. 10: Borrowing
by the national government (and state and private borrowing for that matter)
from central banks or other banks of issue, increases the supply of “money,”
which causes inflation. (Inflation of
the money supply is to be distinguished from price inflation. They are related, but with price inflation
other economic and social factors enter the equation.) Inflation leads inexorably to the appearance
of rising prices for goods and services.
In times of inflation, typically and generally, the price of goods and
services do not increase, but rather, the purchasing power of “money”
decreases.
Fact No. 11: Inflation
is a tax. It is a hidden tax. Inflation is a tax because it is the means by
which the national government acquires the money to pay the expenses of
government; with the burden of inflation then allocated across the board to we,
the people, (although, for myriad reasons, inflation is felt more by some than
others) in the form of what appears to be higher prices for goods and
services. It is a hidden tax because the
cost of inflation is not withheld from your income by your employer, and you do
not write a check for this tax each quarter or once a year on or before April
15th. Rather, you pay this
tax at the register when you buy goods and services. You pay the hidden tax of inflation in
addition to all the other visible direct and indirect taxes you pay for goods
and services. Congress, the Executive,
the Judiciary and the central bankers know that inflation is a hidden tax,
although they will not admit that. They
are the ones who keep, or try to keep, it hidden from we,
the people. They know that if sufficient
numbers of we, the people (that elusive critical mass), were to discover what
is being hidden from us, we would demand an end to unbridled government
borrowing from central banks, as well as out-of-control spending. Indeed, we might even demand the
unthinkable—a return to Constitutional money, i.e., silver coin and gold, and a
return to limited government as envisioned and intended by the framers of the
Constitution.
Fact No. 12: The
federal income tax is, in large measure, designed to take some “money” out of
circulation in order to reduce the rate of inflation. Thus, a principal purpose of the federal
income tax is to attempt to bolster the purchasing power of “money” and hold
down or prevent the apparent increases in the price of goods and services. The hidden tax of inflation consumes some or
all of any increase you may receive in your income. (It is confiscation and wealth
re-distribution at its worst, or best, depending on where you fit in.) So does the direct, un-apportioned tax on your
income, i. e., the federal (and state) income tax. All too often, inflation results in a net
loss of income even after a raise in your salary or wages, due to the reduced
purchasing power of “money.” So, too,
does a direct, un-apportioned tax on your income. There is no practical difference to your
pocket book and bottom line between inflation and taxation. There is, however, a huge practical benefit
to the politicians and central bankers who tax us covertly by inflation, rather
than overtly by direct and indirect forms of taxation.
Fact No. 13: Borrowing
by the government from a central bank, e.g., the Federal Reserve,
is unnecessary and is inimical to the interests of we, the people. If it wanted to the national government could
create “money” itself and spend and/or loan it into existence without paying
any interest to central banks. That is,
it could cut out the middleman and save many, many billions of dollars
annually. Better yet, the national
government could, and should, return to Constitutional money, i.e., silver coin
and gold, and rid the Nation of worthless, irredeemable, debt-based, legal
tender created by the fractional reserve banking system called the Federal
Reserve.
In fine, we are a nation of debtors, not just taxpayers; and
more the former than the latter. Indeed,
you are a “debtpayer.” We all are. This is so even if you have never borrowed a
dime and even if you currently owe no “money” to any commercial lender or
central bank. As of July 2007 every man,
woman and child in the U.S.
owes about $30,000. Every newborn owes
his or her pro rata share of the national debt.
That is arguably one reason why a social security number is issued at
birth; when in the not too distant past a SSN was not issued in the U.S. until
a person attained the age of 16; an age when one typically entered the
workforce, if only as a part-time, temporary worker.
The federal income taxes we pay are primarily to service
some of the interest on the national debt and to serve as a hedge against
inflation by taking money out of circulation, not to provide services for we
the people or to fund the expenses of the national government. Don’t believe me! Please, look into this for yourself. Check the sources I have provided to
you. Check other sources too.
After we (you) have checked the sources and armed ourselves
with the facts and the truth, we should all confront our elected and appointed
officials with the facts and demand answers and solutions to the dire economic,
monetary and fiscal issues confronting this nation. When we do that, but not before, all else
that ails us as a nation will fall into place, root and branch.
But, if you are simply content with whining about out of
control and uncontrollable government borrowing and spending, you might consider
dropping the “I’m a taxpayer, man” line and preface your remarks with: “I’m a
debtor too, man.” Better yet, just tell
them you are a “debtpayer.”
(July 10, 2007,
revised July 13, 2007)
Stevan Douglas Looney is a lawyer who practices in Albuquerque,
New Mexico, and has, like many other
American patriots, taken it upon himself to study and gain a working
understanding of monetary and income tax laws and policy.
Sources:
1. G. Edward
Griffin, The Creature From Jekyll Island; William Grieder, Secrets
Of The Temple: How the Federal Reserve Runs the Country; Devvy Kidd, Why
An Income Tax Is Not Necessary To Fund The U.S. Government, http://www.Devvy.com/notax.html;
Bureau of Public Debt, http://www.treasurydirect.gov/NP/BPDLogin?application=np
2. G. Edward
Griffin, The Creature From Jekyll Island;
William Grieder, Secrets Of The Temple:
How the Federal Reserve Runs the Country; (The federal income tax was
imposed in 1913. Consider that from 1787
(the date the Constitution was ratified) to 1913, a period of 126 years, the U.S.
operated quite well, typically with a surplus, and without an established
income tax.)
3. H.R. J. Res.
192, 5 June 1933, Ch 48, 48
Stat. 112; Act of Jan. 30, 1934,
§ 6. 2 (b) (1), 48 Stat. 337; cf. Edwin Vieira’s scholarly work, Pieces Of
Eight, Vol. II, pp. 984-1024
(discussing at length HJR 192); G. Edward Griffin, The Creature From Jekyll
Island, (Ch. 8, The Mandrake Mechanism).
4. G. Edward
Griffin, The Creature From Jekyll
Island.
5. U.S. National
Debt Clock, http://brillig.com/debt_clock/
; U.S. Treasury website (Treasury Direct), http://www.treasurydirect.gov/govt/reports/ir/ir.htm
.
6. Edwin Vieira,
Pieces Of Eight, Vol. I and II, passim; G. Edward Griffin, The Creature
From Jekyll Island, passim; William Grieder, Secrets Of The Temple:How
the Federal Reserve Runs the Country, passim; Eustace Mullins, Secrets
of the Federal Reserve, http://www.apfn.org/apfn/reserve.htm
; Federal Reserve Act, 12 U.S.C., ch 6, 38 State. 251 (Dec. 23, 1913); H.R. J. Res. 192, 5 June 1933, Ch 48, 48 Stat.
112; Act of Jan.
30, 1934, § 6. 2
(b) (1), 48 Stat. 337.
7, 8, 9, 10, 11 and 12 Edwin
Vieira, Pieces Of Eight, Vol I and II, passim; G. Edward Griffin, The
Creature From Jekyll Island, passim; William Grieder, Secrets Of The
Temple: How the Federal Reserve Runs the Country, passim; Stephen Zarlenga,
The Lost Science of Money; Eustace Mullins, Secrets of the
Federal Reserve, http://www.apfn.org/apfn/reserve.htm; John Maynard Keynes,
The Economic Consequences of Peace (1920).
13. Stephen
Zarlenga, The Lost Science of Money;
Edwin Vieira, Pieces Of Eight, Vol. I and II, passim; G. Edward Griffin,
The Creature From Jekyll Island, passim; U.S. Constitution, Art I, Sec.
8, cl. 5 (“The Congress shall have power [ ] (5) To coin money, regulate the
value thereof, and of foreign Coin, and to fix the Standard of Weights and
Measures [ ].“); Art I, sec. 10, cl. 1 (“No State shall [ ] coin money, emit
bills of credit, make anything but gold or silver Coin a Tender in Payment of
Debts [ ].”)
Other Sources:
Americans
For A Free Republic (Nelson Hultberg)
http://www.afr.org/Hultberg/hultberg.html
American
Monetary Institute (Stephen Zarlenga, author of The Lost Science Of Money)
http://www.monetary.org/
Carolyn
Baker, U. S. History Uncensored, What Your High School Textbook Didn’t Tell
You (A Curriculum Abstract For U.S. History 1865 to the Present), Universe
Books, 2006
Catherine
Austin Fitts, Solari, www.solari.com
Debt
Money, http://landru.i-link-2.net/monques/
Federal
Reserve Board
http://www.federalreserve.gov/otherfrb.htm ; http://www.federalreserve.gov/generalinfo/fract/
Freedom
Force International (G. Edward Griffin, author of The Creature From Jekyll Island)
http://www.freedomforceinternational.org/freedom.cfm?fuseaction=issues
(One
of the very best sites for well-balanced and reasoned information and
commentary in the area of money and taxation)
Ludwig
Von Mises Institute
http://www.mises.org/
US
Comptroller of the Currency (Administrator of the National Banks)
http://www.occ.treas.gov/speeches.htm
Russo, DVD documentary, America: From Freedom To Fascism, http://www.amazon.com/America-Freedom-to-Fascism/dp/B000JVSUSE
The Money Masters DVD documentary, www.themoneymasters.com
