April 17, 2018 - Freedomain Radio - Stefan Molyneux
22:56
4061 Facts About Taxation
The deadline for American's to forfeit a percentage of their income to the United States government under the threat of force is April 17th, 2018 - Tax Day! Stefan Molyneux discusses the nature of taxation, the vast amount of funds stolen annually by the U.S. government and the unspoken reality of the system most people accept as a given. Your support is essential to Freedomain Radio, which is 100% funded by viewers like you. Please support the show by making a one time donation or signing up for a monthly recurring donation at: http://www.freedomainradio.com/donate
So today is tax day in the United States, and of course I wish to express my condolences to my American friends who have to write these checks, the loops of which in the letters are actually the nooses around your children's futures,
because there used to be this old idea that the free market was a game, the government might be a referee, but it should not pick sides, it should not get involved, it was merely The objective arbiter and dispute resolver of objective rules like private property and contracts and so on.
And the idea that the government should get involved in the game and pick winners and losers, like a stock market analyst, throwing darts at a dartboard full of stocks was incomprehensible.
And then I guess starting in the post-Second World War period and in particular in the 1970s there was this thing called Keynesianism and this is after John Maynard Keynes who gave a particular sheen of respectability and economic legitimacy to getting the government involved in the business cycle.
Without getting into all of the details, and you can look up the Austrian economics theory of the business cycle for more on this, the basic idea is that the economy sometimes grows and it sometimes shrinks.
Most of that is to do with government intervention, with overprinting of money, followed by control of interest rates.
It's like trying to play basketball when somebody's randomly dialing up and down the gravity from like Jupiter level 90 G's to minus 40 helium levels.
So you can't really play very well when the laws of physics keep changing and the government keeps changing money at interest rates and sucking money out of the economy through debt and so on.
But Keynes came along and said, well, you see, there are these business cycles and what the government needs to do is when...
Consumer confidence is low.
When there's a recession, the government needs to, you know, cut taxes and spend money like crazy to stimulate an economy.
You know, like if you're kind of down, you just snort a whalebone full of cocaine and apparently you're fine again.
And then, of course, governments love that part.
Oh, wow, we get to cut taxes, which is very popular, and we get to spend a lot of money, which is also very popular.
So, yeah, give government and politicians two popular things, and lo and behold, they decide they want to do that stuff.
Now, sane people who could, say, count would say, or did say, well, Dr.
Keens, that's all nice in theory, but what happens is you're going to end up with cutting taxes, a lot of government spending, huge amounts of debt, right?
Massive deficits, huge amounts of debt.
And he said, no, no, you see, what's going to happen?
It's one of these things that's amazing how much nonsense is spoken in history with a straight face, you know, with stern, pedantic, monochrome tones.
And he said, no, no, no, that's fine.
You see, what's going to happen is, when the economy goes up, the government is going to responsibly Cut its spending and or raise taxes again to balance things out, right?
So in other words, politicians very eager to do two things, which is cut taxes and raise spending, are going to do the exact opposite of what politicians like to do when the economy is riding high.
They're going to increase taxes and or massively cut spending.
Now, this is all nonsense, of course, but people are promoted in history like you know about people in history in general because they serve...
The needs of the rulers. They serve the needs of the power elites.
Why do you hear about particular philosophers and not other philosophers, you know, prior to the internet when there was this direct pipeline?
Because they serve the needs of the elites and therefore the elites say, oh yeah, that guy is really, really wise.
Would you ever have heard of Socrates if Socrates hadn't ended his life by saying, obey your rulers, which was his final curse on a population he believed was rather dumb, ruled by politicians he believed were extraordinarily corrupt.
Obey terrible people was his final curse on the civilization that killed him.
Now, the Republicans pushed back quite a bit against this Keynesianism for a while, but they kind of gave up the ghost fairly quickly.
The last Republican president who didn't endorse this Keynesian economics was Dwight Eisenhower, Who left office in 1961?
And by the by, this is the guy who gave that big speech that everyone loves so much on the military-industrial complex just as he was leaving office?
Ha! Excellent!
So now you can't do anything about it.
You decided to out it.
Well, way to appear courageous without actually doing anything courageous.
Good job. So, by 1971, and this was pretty ironic.
In 1971, there had been of course a massive war against communism, been really going on since 1917, but massive war against communism in the Cold War, massive war against National Socialism.
See, communism is International Socialism.
Nazism is National Socialism, so it's like pick your poison time.
But Nixon, along with McCarthy, had been very big on outing the communists, rooting their way through the State Department and other places in the United States government, who had handed over, what, a third of the world's population or a quarter of the world's population to outright communism.
And he, in 1971, said that he was now a Keynesian in economics.
And to people who are into the free market, the idea that governments have to intervene in the economy to ensure optimal outcomes, that there's these big giant geniuses, these thunderbrains that can look at all of the infinite levers of human choice and market allocation and resource allocation and ambition and All of this crazy stuff that goes on in the free market that they can look at this infinite dial and move them all far better than the free market.
The central planning? Well that's very close to socialism and some people of course thought that it was outright communism coming from the guy who was a big commie fighter for most of his career.
The idea that he would adopt this kind of socialism slash communism central planning ethic.
In 1971 was pretty bad.
And so, yeah, we got Reagan, George Bush Sr., George Bush Jr., and now even Donald Trump.
Well, they're kind of going on this Keynesian thing.
We're going to cut taxes to spur the economy, but cutting taxes...
Without cutting spending is simply deferring tax increases.
You understand, right? I mean, you're just saying, well, it's like buying bonds, you know.
Hey, the government's going to pay you back 5%.
It's like, where are they going to get that money from?
Well, by raising taxes generally on people who can't afford bonds.
So, actually, no, there's a lot of people who can't afford bonds.
But it's just a way, anytime you expect the government to add value, all you're doing is deferring taxes from here to infinity.
And so this cutting taxes...
Without cutting spending is a populist move based upon people who've been raised by a bunch of school teachers who have neglected to tell them anything important or essential or mildly revelatory or factual about the economy and about money as a whole.
And just go to the average public school teacher and ask her whether or not they understand the difference between spending, deficit, debt, what the gold standard was, what Keynesianism is, what are unfunded liabilities, I don't know.
You'll probably just end up being called a racist.
Because, you know, that's the new thought crime.
And it's crazy.
The government is just astonishing in how much it takes in and how much it spends.
This massive, multiple octopuses in the brain leeching off the spinal fluid of the next generation is just astounding.
So it spends, the government of the U.S., $4.5 trillion a year.
And it makes $3.4 trillion, or takes, really takes $3.4 trillion in tax and other revenues.
That is absolutely astounding.
Because what that means, of course, is that it has a net operating loss of close to $1.2 trillion.
$1.2 trillion a year.
That is astounding. So the budget deficit, $1.2 trillion a year.
Now, this is when it's been a long time since the 2008 recession.
So the economy is humming along fairly well.
There's no major new wars, fingers crossed, and no major shocks to any particular industry.
Unemployment is low. So this is kind of optimum.
Now, of course, according to Keynesianism, this is exactly when the government should be massively cutting its spending.
And perhaps even raising taxes.
But no.
None of that is happening.
Of course, right? Take drugs.
Take uppers when you're down and take uppers when you're up.
It seems to be because, you know, addiction is addiction.
So, U.S. budget deficit increasing by $1.2 trillion a year when things are going fairly well in the economy and the tax cuts are adding $100 billion to that every single year.
And Reagan did the same thing, cut taxes while federal spending grew by two-thirds under his presidency.
So, yeah, when you're paying your taxes, you're not fundamentally paying for anything that you're receiving right now, because that's, you know, generally borrowed or it's debt or something like that, or treasuries owned by foreign bankers and so on.
What you're doing is you're giving the government money or resources which it uses as collateral to print and borrow and create money out of thin air, right?
So you're not really giving the government money, you're giving the government the leverage to borrow against your future and your children's future and your children's children's future and so on.
And to put sort of that in context, depending on your income, let's say you make six figures A year on average over the course of your career, you're probably going to pay about a mil, about a million dollars over the course of your life in taxes.
Could be half a mil, could be a quarter mil, depending on what your income is.
So the recent airstrikes on Syria cost about a hundred million dollars.
So think of you and your hundred closest friends and family.
They will be working for the rest of their lives because the US government decided to bomb What the Syrians claim was a cancer research facility.
As a survivor, I'd just like to say, frack you very much for all of that.
So, yeah, you and 100 of your closest friends, you and 99 of your closest friends, give or take, are going to be working for the rest of your lives to pay for strikes on Syria for one night.
And that's where things are.
And that, of course, creates a lot of hostility, a lot of anger, a lot of desire to disrupt and harm the U.S. economy by provoking it to endless war.
This, of course, was the whole point of this terrorism in the large sense.
So, there's a lot of liabilities.
Now, we think about...
Spending, we think about deficits, we think about debt, but the real monster in the room, the real elephant on the anthill are unfunded liabilities.
So these are promises that the American government has made to future recipients of government largesse, Social Security, Medicare, Medicaid, all the unfunded liabilities.
So promises that the U.S. government has made, which demographically it's going to have to try to fulfill on, that it does not have any money for, that it does not have any budget for.
So if you're an American citizen and you actually pay taxes, your liability for the total US debt now stands at 1.05 million dollars.
And these numbers are slightly old, so it's worse than that now.
So this is from US population of 325 million, so the 20 trillion debt or so works out to $61,476 per man, woman and child currently consuming oxygen on the fruited plains.
But of those 325 million people, only about 120 million or 37% of the American population actually pay income tax.
So you take the national debt, divide it by the number of people who pay income tax, that's $166,500 per taxpayer.
But, now the unfunded liabilities can be calculated, I've seen estimates of 45%.
A trillion dollars all the way up to north of 200 trillion dollars, but taking just a figure here, I'll put notes of this below, sources below, divide the unfunded liabilities by the number of taxpayers, that's $891,500 per taxpayer.
So you add in the $166,500 for the official national debt, so each current taxpayer has a liability of $1.05 million.
Now that doesn't include municipal and state debt, that's also completely mental.
Now, given that there's a lot of people who are working for the government rather than working in the remnants of the free market, that's even more challenging.
So if you're actually producing stuff rather than standing in a bureaucratic, sloth-like way, in the way of people wanting to produce and consume and become efficient, in other words, if you're working in the remnants of the free market rather than being a government bureaucrat, well...
You can slice that number even lower, which means that the liability per genuinely economically productive citizen is probably $1.5 million or more.
In other words, far more than you'll pay for the rest of your life in taxes.
Now, how are you going to pay for this?
Well, you're going to have to have massive Tax increases, which is not politically feasible or actually really possible.
And so the IMF, the International Monetary Fund, and a source for Bruce Coburn lyrics, had a 2013 proposal that seemed rather...
Assertive, if not downright pickpockety.
The proposal said, well, you should have a one-off capital levy of 10% or more of private savings.
You know, the money that you have in the bank that's guaranteed by the government, which they also can't afford should there be a bank run.
And in order to avoid, this is what the IMF said, in order to avoid Public opposition or possible capital flight, they say that you should take the money out of people's bank accounts or other savings vehicles on a weekend or on a holiday with no advance warning.
So, if your numbers change, you'll know that people have been listening to the IMF. Now, how could this possibly work politically?
Well, 57% of Americans have only $1,000 or less saved.
So, 10% of that, you're at $100, but there's tons of money to redistribute.
Now, of course, none of this money would actually go to paying down the debt.
It might go to pay some interest, but it would be used to pay off politicians' friends and punish their enemies and the usual stuff that occurs in politics.
Because, as the old saying goes, whoever steals from Peter to pay Paul can always count on the support of Paul.
Now, Social Security, of course, with the baby boomers heading into the twilight zone or twilight end of their life.
So there's all these theories that you've paid all this money into the system and therefore you should get this money back, but there is no money.
There's no money in the system. The government spent it long ago.
The US government is spending almost all, they take in just a little under 800 billion dollars in social security payroll taxes, but they've been spending almost all of that to pay current bills rather than investing them to fund any benefits for retirees.
So, yeah.
Now, they also, the government in the US and other places, can do a lot of jiggery to keep debts off the book.
So this is Lawrence Kotlikoff says that it's 200 trillion dollars in unfunded liabilities.
And these are generally kept off the books.
And this is why there's very strong cases to be made that both China and Russia are in better financial shape than America.
And this ability to move debts off the books, you know, there's all this talk about the Clintons balance their budgets.
It's like, yeah, well, but they just didn't record all of the US government's debts.
And that's how they ended up being able to do that.
So We all know that this is not a system that anyone in particular chose.
This is not a system that anyone in particular chose.
And of course, if you were to start with a blank slate, like a truly free society, a free market environment, a free society, and you were to say, well, what we want to do is give a small monopoly of people the power to counterfeit, the power to borrow against future generations, the power to take people's property by force, And the result of that concentrated capacity to do great evil would be paradise.
People would say, well, that's a terrible system.
I mean, if the government can just print money out of thin air, then they're unrestrained and they're going to do the soft, hidden, corrosive taxation.
Of inflation, which hits the poor and those on fixed incomes the hardest.
In terms of harming the workers, inflation is just horrible.
And if the government has the power to take from some people and give to other people, you would say, if somebody proposed such a system, you'd say, well, that's terrible.
Power corrupts. This is a huge amount of power.
They're not going to follow any principles.
They're just going to end up buying votes.
And the rich, because they're being targeted by the government, are going to end up with a massive interest and control over the government in order to try and protect their assets, while the poor will become increasingly lazy and degenerate and dependent, and that would be a terrible, terrible system.
And that's the funny thing. When I talk about the ideal society, which doesn't mean everything's perfect, it just means...
Less evil. It's the government.
The government, every, you know, movie comes with a tagline, in a town where, right?
The government comes with a tagline, free evil!
And it's like, okay, well, if you get free evil, try free Lamborghinis and see how long they last.
Free evil lasts even less.
And so when I talk about a free society and people say, oh, but who will build the roads?
Who will handle defense?
Who will adjudicate disputes?
Okay, so when you talk about a free society, a voluntary society, stateless society, everybody hits you with all of these questions, which are actually very easy to answer, and I've got books on my website to answer all of these.
But when you look at the system that is And you imagine proposing that in a free society, it's easy to see the objections that would arise and the horrible, horrible results of allowing this capacity for concentrated theft, for vote buying, for virtue signaling, for massive forced wealth redistribution to occur.
So, when people say, oh, well, charity should take care of the poor, and it should.
Charity should take care of the poor, because charity survived by actually helping the poor, whereas the government survives by using the soft enslavement and prison of the welfare state to keep the poor down, so they'll continue to vote for bigger and bigger government and more and more state power.
So of course charity should help the poor.
Helping the poor, it's funny, you know, the only people who say that charity will be useless helping the poor and the welfare state is great at helping the poor, you know for a simple fact that those people have never actually tried to help a poor person or somebody down in their life.
It is a very challenging business.
You want to help them out, but you don't want to enable their bad decisions.
You want to give them a leg up, but you don't want to give them so much that they lose their ambition and motivation.
Because when you're poor and low-skilled, it's a long, hard haul up to any kind of decent and enjoyable job.
I mean, I myself got my first job when I was 11, and, well, it took quite a long time to get a job I actually enjoyed.
Like, I worked as a maid or a cleaner, an office cleaner.
I worked in a hardware store.
I worked as a waiter for many years.
I did gold panning and prospecting up in the boonies in minus 30 degree weather.
I mean, it took a long time to get a decent job, and it's a real...
Challenge, right? I mean you want to help women who can't afford to feed their children but you don't want to give women so much money that they decide having children is a great business to get into and those children then grow up without fathers with all of the attendant problems associated there too.
It's really really challenging to help people and the government is a big giant club.
It is a big giant hammer and of course when you have a hammer as the old saying goes everything looks like a nail and when you have a big giant redistribution estate every problem It seems to attract people who just say, well, let the state handle it, let the state do it, to the detriment of everyone, and to the loss of the personal satisfaction you actually get from helping people.
Just surrendering to the predatory, finger-pocketing, well, pistol-whipping, finger-popping of the state doesn't give you the satisfaction of actually helping people and knowing that their lives are getting better as a result of your intervention.
So it's funny, when you propose a free society, everybody puts up these spears of endless objections, but when you look at the society that is, people just accept it for the way that it is, and that is terrible.
I mean, that is a terrible thing.
We should be consistently and continually reinventing the way that we view society.
We should take nothing that we've inherited for granted.
We should be skeptical of every solution that we have inherited, and we should continually reinvent Look at and compare and contrast our current society with reasonably ideal moral standards.
Because if you give the state the power to create money out of thin air, to type whatever it wants into its own bank accounts, well that imaginary money converts to real power and a very soft predatory power, which is hard to delineate and not usually one person in a thousand really understands how this Terrible system works.
And counterfeiting is a form of theft.
We all understand that.
So this imaginary money breeds real power.
The real power breeds real corruption and makes people addicted to the immorality of taxation, which is theft.
And the problem that we're facing is society has become so top-heavy and so dependent upon the power of the state That the size and complexity and power of the state has now become so great that it has eclipsed or occluded the basic moral principles upon which the freedoms we still treasure were founded.
It is occluding and eclipsing.
It's like pouring mud into a glass of water.
How long does it take before you cannot see through to the other side?
The state power is so great that we've lost track of the simple moral principles that we need to return to if we are to survive as a culture and as a civilization.
And one of those, of course, the most foundational and the most fundamental, which we are reminded of this day.
