imported post
I think I did a real crap job of explaining that. Let me know if you need clarification.
But please do understand, that on the subject of taxes, you are speaking to a friend. I abhor the way our tax dollars are spent. I abhor that certain things are even subject to tax in the first place.
What are the basic essentials for human life? Food, water, and shelter. Yet we pay tax on water, we pay tax on food, and we pay tax on our shelter (including clothing). In essence, we pay tax to simply SURVIVE.
As far as earned income goes, courts have upheld the IRS' assertion that ANY and ALL earned income is an "accession to wealth". I call BS on that. You tell me how an American who is living paycheck to paycheck, going two days without eating because they haven't been paid yet, is growing their wealth by laboring. They're NOT!
When a man earns $600 in a week and spends $580 of it meet the basic needs for human life, he has only grown his "wealth" by $20. Tax the $20 if you must... but every dime that he spends on his dwelling, clothing, food, water, electricity, heat, and transportation should be deducted from his earned income. These things do not propel his wealth. And without transportation, most folks can't become good little taxpayers because most folks wouldn't be able to get to work.
A vehicle is not an accession to wealth... it DEPRECIATES in value and cost money to maintain. So any money spent on it cannot be attributed to making him wealthier. A home is not accession to wealth as long as he LIVES in it. If he sells it for a profit, fine... tax the profit. But until he has realized a gain, he has not gained any wealth whatsoever. As we've seen in recent years, home values can, and do, depreciate... so it's not fair to say that they're an accession to wealth. Not until the gain is fully realized. Until then, it's just a paper gain (or loss).
Nevermind the fact that a mans labor is not a capital gain. It is remuneration for services rendered. Funny how the courts uphold that compensatory damages in court are not considered "income" (because you are simply made whole for a sustained loss), and therefore not subject to tax. And yet, for some stupid reason, when you are compensated for time lost, it suddenly becomes taxable. I ask you, logically, what the hell is the difference? Is not time away from my family a loss? Is not the wage I earn a method of compensating me for that loss? What idiot decided that a WAGE was a capital gain? I have not gained when I trade labor for money... I am merely made whole for my loss.
Then there's the whole issue about fiat currency. In that our dollar is not backed by any tangible asset (it's backed by the full faith and credit of the US instead), I'd like to know how a piece of paper is worth anything. I challenge anyone reading this to grab their wallet, pull a bill of any denomination, and read it. "This note is legal tender for all debts, public and private." A note, by securities definition, is a debt instrument. It clearly indicates this by saying that it's legal tender to satisfy all debts. If I lend someone money, and they repay me that money verbatim (no interest or gains made on my behalf), I do not have to claim that repayment of debt as income because it's merely remuneration for a previous loss. In effect, whenever you "earn" a dollar, you are being paid with a promissory note. The Federal Reserve (a private institution.. there's nothing "federal" about it) is giving you an IOU that says that the bill is worth something because they have the credit to back it up. We are paid in LOANS. Because a loan is a debt instrument, it intrinsically is worthless until the debt is repaid. So tell me again why we're paying tax on something that has absolutely NO intrinsic value?
Congress, the IRS, and the courts have this weird way of confusing the differences between "assets" and "wealth". Not all assets make you wealthy. A stock certificate is an asset... and while it has the ABILITY to create wealth, it does not always do so. That asset can LOSE money, creating a capital loss rather than a capital gain. When I earn $20, then spend that $20 on food... I pay tax twice. Once for earning it, and then again in the form of sales tax. Even though I did $20 worth of labor, I am only able to buy $14.52 worth of food. And that food does not increase my wealth... it merely allows me to SURVIVE.
We work about 3 months a year just to earn enough money to pay the federal government. I mean really, that's how it breaks down. The government may as well just take 100% of our earnings for the first 3 months of every year and then let us keep 100% of what we earn during the remaining 9 months... in the end it works out to be about the same anyway. You know what they call a man who works without being paid? A slave.
Oh but wait... our government provides us with these AWESOME benefits, right? Well guess what? Slave owners provided their slaves with AWESOME benefits too... free housing, food, and clothing. Yes, I know... but slaves were subject to adverse living conditions and did not have the freedom to do as they pleased.
Well the same thing happens to us if we decided that we don't want Massa' Sam having us work 3 months for free. If you dare to claim your own wage but not paying him his annual tribute, you lose your rights, your property, and your freedom.
I have a theory that the federal government, in the 1800's, didn't care so much about freeing slaves on any moral ground as much as they cared about being able to tax their wages. Think about it... you've got thousands of people working but not earning an income. Without an income, there is no tax generated. I also believe that raising the minimum wage has less to do with helping low wage-earners cope with the demands of paying bills, but more to do with increasing the amount of income tax they generate. I did the math some years ago when the minimum wage increased, and it worked out to be something like an additional $5 billion in additional income tax revenue (based on US Department of Labor numbers that broke down the number of minimum wage earners in the US and based on the average number of hours worked).
I'm all for State taxes and sales taxes on "unnecessary" goods and services. At least we'd have control over that. This business of taxing food and such is nonsense... I don't care if the food is "prepared" or not (which is considered a "service" and therefore subject to tax). You can't even be homeless in this country without paying tax. If a homeless panhandles $5,000 a year on the street, he's technically supposed to claim it as income. Yeah right. $5,000 works out to be about $13 a day. If he were to eat two meals a day (remember, he has no home or utensils to prepare his own meals, therefore he's almost exclusively limited to buying "service" food that's already prepared), he's likely spending every dime he has just to eat. Yet he gets sapped for paying tax on his survival. And I love how the government targets the inner cities... the poor... with taxes. Detroit, for instance, doesn't have any major grocery stores. Maybe some local mom and pop shops here and there... but the city, as a whole, does NOT have access to "unprepared" foods. Their only real option is to buy the unhealthy, expensive, and heavily taxed, "prepared service" foods. But these are State and local issues... we could easily control this if we really wanted to.
But on federal matters, we absolutely do not have representative control in United States in Congress. Not when delegates from 49 other states are eating out of the same pie. I'd rather pay 20% income tax to the State than pay a DIME to the federal government. State services would certainly improve... which would mean the federal government wouldn't have to spend so much money subsidizing State programs. And in the end, the People would have MORE money to spend. Talk about a stimulus plan!
If the federal government needs a program approved, they should have to get the money from the States... not from the People directly. I bet you if State congresspeople were draining our State tax accounts to pay for half of these federal programs, that we'd have voted them out long ago. If the people of these 50 collective States started having their State services slashed because we needed to fund these illegal wars overseas, I bet you we'd have had our troops home years ago. But since the government dips into us directly, and they collectively decide what to do with it, we lose control over what our collective State delegates do with our money. The federal government should have to ASK for money from the States... they should not be taking it from the People directly. What business does a group of politicians in California have over spending money that we earn here in Michigan?
The whole system is horse @#$%, man. It really is. We are NOT represented by the federal government. It has become a system all on its own... controlled by the iron triangle of elitists who keep them in power. We are no longer a Republic.
I support my State wherever I can. I most certainly support my county and city. I do not, however, support my federal government. They can't even be straight with us and tell us that they fell asleep at the wheel and drove us off course. We're a few years away from going over a cliff, and they're still trying to make us believe that all's well.