I want to start off this entry with this: I pay my taxes. I believe that God instructs us in His word to submit to governing authorities, and Christ instructs us to “Render unto Caesar…”. Funny that the subject of that sentence is becoming more and more realistic.
In fact, I just filed my tax return a couple of days ago…and now you know why the topic is on my mind.
Taxes fund the government.
As simple as that sentence is, I think we overlook, sometimes, what it really means. First of all, the bigger government gets, the more money it requires to operate. The more money it requires to operate, the more you will be taxed. Vice Versa: The smaller government gets, the less it requires, the less you will be taxed.
We, the People, elect to have a government (as I’ve discussed somewhere else) for one reason: to protect our liberties. You have the right to live, the right to live your life freely, and the right–within that free life–to pursue happiness (to gain property being the prime example of that). If I want a group of people to defend those rights, then I must pay for it and I will be happy to pay for it, just like I was happy to pay for the ingredients for white-chocolate blueberry bread pudding at the store to share with Tim and his family.
With those simple rights in mind, our government was created. The funding for the government came mostly (about 80%) from tariffs and alcohol taxes. That’s right.
Save a minor exception during the Civil War, no income tax was required from citizens of the United States until 1913.
In other words, the income tax in America is only about 99 years old. Put another way, our country and government existed for 137 years without an income tax. HOW?? The government was small.
Income tax isn’t the only way that your taxed, though. I mean, you obviously see the effects of sales tax, property tax, maybe consumption tax, etc. What I mean is–taking money our of your paycheck and adding money to your purchases isn’t the only way that government has found to tax you.
The other thing that came to life around the same time as the income tax was the Federal Reserve System. One of the things that would begin as a result would bet the inflation of the money supply.
Inflation is a Tax.
Get this: money is subject to the laws of supply and demand. Supply goes up, demand goes down. Supply goes down, demand goes up. The relationship may not always look like completely straight lines on a graph, but it’s simple. The more of something there is, the cheaper you can get it for. Hence: bread is cheap, Monet’s paintings are expensive.
To rapidly expand the purchasing power of the country, the government, from time to time…to time, instructs the Federal Reserve to print off more money. Many people see this as a good thing, because the immediate result is $1,000,000 new dollars to purchase stuff with. This seems to allow society to move faster than usually possible because it has more money. Unfortunately, the natural laws that govern the market produce a reaction to this over TIME. More money in the whole supply actually devalues the individual unit–the dollar.
It’s like this: I have 5 chocolate bars and 6 people who want to buy them. I’m gonna charge $1.50 each because I’m gonna make some profit on the deal. Low supply and high demand? Nice for me. All-of-a-sudden a truck comes by and dumps 20 chocolate bars in my house. Holy cow! That’s $1.50 times 20…I’m rich. Except for one thing: now 6 people can all have chocolate bars. Automatically the demand lowers. If I keep my price at $1.50 (which is high) they might not be as inclined to purchase them knowing about my vast supply.
The dollar is the same. We wonder why we are now paying $30,000 for a car that 50 years ago would have cost $3,000 (if that’s even close to the right ratio), and this is one of the reasons. Because of massive inflation, our dollar is WORTH LESS. Every time the government prints off more money, you are taxed. You’re not getting a raise at work, therefore your paycheck won’t be able to buy as much. Tell the government “You’re Welcome.”
I’m gonna finish up here.
I’ve been hearing lately that “inflation is a good thing.” This is never true in the long run.
Way more to come on this later. I have to go pick up my kids from preschool. That I pay for. Then I pay taxes to pay for a lot of other kids to go to school…
And go on $57,000 field trips to the movies.