Tax Cuts for the Rich? Abolish the Income Tax Insteadby Jacob G. Hornberger
Dec. 01, 2010
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The left and right are debating whether tax cuts for the rich should be extended. The debate only goes to show how thereís really not any difference, philosophically speaking, between liberals and conservatives. They both believe in the income tax and the welfare-warfare-state programs that the income tax funds, and their battle is simply over who is going to pay for the ever-growing expenses of the welfare-warfare state.
As most everyone knows, the federal government is spending much more than what it is collecting in taxes, to the tune of at least $1.3 trillion per year. How is it getting the money to pay the extra $1.3 trillion? Itís borrowing it, just as it has been doing for many years. Thatís why the federal governmentís debt is almost $14 trillion. That means that you, your spouse, and your children each owe an average of $44,000, given that the American people are, effectively, guarantors of the governmentís debt.
Ultimately, the federal government does what governments have historically done after incurring massive indebtedness. It resorts to the printing press to print the money to pay off its debt and fund its ever-growing expenditures. Thatís what the Federal Reserve is all about. It enables the government to default on its debts, without appearing to default on its debts, by paying creditors off in devalued dollars.