Taxes Are Freedom?
Every year, around this time, we all gather by the fire, hot cocoa in hand, maybe mixed with a little something stronger, and have a lovely time filling out accounting forms for the Federal Government. A grand tradition for wasting time, money and effort.
Heck, the Federal Government already knows what money you earned over the year, and knows if you owe them or they owe you. Every small business owner can tell you about the time they learned they were supposed to pay taxes quarterly. They didn’t know, but the Fed sure did.
Ironically, income taxes are a relic of the gold standard. Yes, that same gold standard so many people think they want to bring back while they rage against taxes.
In the 1860s, when the country was fighting to decide whether slavery would continue in North America, the nation’s budget was bound by the gold and silver available for conversion. The only way to pay for government activities was through taxation.
The Revolutionary War, freedom from aristocratic rule and a chaotic divided nation, was paid for through blood, and yes, taxes.
The Civil War, freedom from slavery and another chaotic divided nation, was paid for through blood, and yes, taxes.
It is a fact, taxes paid for freedom — but are completely unnecessary.
MMT (Modern Monetary Theory) shows that with a fiat currency, the cost of government isn’t financed through income tax, it’s financed through printing money. If the government needs to pay a contractor $1,000 they just print $1,000 and hand it over. Done.
In fact, they did the same for the Revolutionary War and Civil War and all other Federal and State activities. Yep, States once printed their own money, too.
So, if income taxes don’t actually pay for anything, and money never even needed a gold standard, why pay income taxes at all?
I think, three reasons. One, the Constitution’s 16th Amendment says the government can tax our income, and we know if the government can do something they will do that something. Two, as MMT says, taxation is the primary way to validate the currency by demanding payments in that currency. In other words, taxes make a dollar worth a dollar.
And three, wealth redistribution, up and down.
Number three is the one that gets debated every election cycle. We ask, do we want more wealth redistribution down to the poor or up to the “productive”?
The answer is, it’s a false choice. Or really, the wrong question. Taxation isn’t about how and where the government spends money, it’s only about how and where they take money.
And one big reason the Federal Government takes money is to maintain a social society based on rules set through civilized democratic power, not individual power. Yes, taxes are freedom.
Let’s see why.
Imagine, what if the Walton family went completely un-taxed and accumulated trillions of dollars? Whoop-dee-doo, who cares, right?
Okay, well, with all that money what’s to stop them buying up all of Arkansas? They make the entire state their estate. So what, you say, they can do what they want with their money.
Fair enough.
But, if they own the title to all the land, don’t they become the entitled aristocracy of Arkansas?
If they own all the land how can the people of Arkansas, through a democratic government, police them in any way?
When one family, or person, owns all the land that all the buildings rest on top of where all the people live and work, they set the rules. They police the police. They control what laws get passed and which don’t. In fact, they’d essentially become a little monarchy. (For a synonymous real-life example, see Elon Musk buying Twitter so he can set the rules.)
Now carry that to a national level.
Royal dynasties always start with who controls the land, who controls the space where people live and interact.
Therefore, here I sign my form, happy to pay my taxes, closing the wealth gap a teensy-tiny bit between myself and the most destitute and the most wealthy.
We need taxes to keep the rich too poor to take over.
To paraphrase Supreme Court Justice, Oliver Wendell Holmes: Taxes are how we pay for a civilized society. I like to pay taxes. With them, I buy freedom.