Ron Paul is speaking at Anarchapulco. The Liberty Report will return on Wednesday. Please enjoy this classic speech from the House floor in 2003:
By Ron Paul
A group of House Republicans is supporting legislation that would replace federal income, payroll, estate, and gift taxes with a 30 percent national sales tax. The bill also eliminates the Internal Revenue Service, giving states the responsibility to collect the sales tax and send the revenue to DC. This deputizing of states to act as federal tax collectors violates the principles of federalism, especially since the plan forces states that have chosen not to make their residents pay sales taxes create a mechanism for collecting sales tax. A 30 percent sales tax on all goods with no exceptions and no deductions will increase taxes imposed on millions of Americans. The sales tax legislation provides a way Americans can receive a monthly “prebate” payment to help offset the cost of the sales tax. Still, many taxpayers would be paying more under the new national sales tax system. If the sales tax becomes law, Congress may never have to increase the rate above 30 percent. This is because it can rely on the Federal Reserve to increase the sales taxes via inflation. Consequently, this inflation tax will increase the pain inflicted by the sales tax on the American people. The imposition of a national sales tax will lead to a flourishing black market for many goods. This will cause the government to increase surveillance of our purchases. It could also lead to government bureaucrats keeping lists of our purchases. This information could be abused by government officials to embarrass and punish political enemies. The surveillance could track whether an individual is complying with government dietary recommendations or is consuming “extremist” content. The need to ensure compliance with the tax laws may also be used to justify replacing cash with government issued and managed digital currency. The proposed national sales tax rate is set at a high level because the bill’s sponsors did not want to reduce the federal government’s revenue. A big problem with tax reform occurs when it fails to include reductions in federal spending. Unfortunately, even some libertarians get sucked into the DC game of ignoring the need to tie tax reform to reducing government spending. Instead, they focus on making the tax code more efficient. Even worse is if they make the supply-side argument that certain taxes should be cut to increase government revenue. Libertarians should view increasing government revenue as an unfortunate consequence of otherwise sound tax policy. They should advocate for tax cuts that are far beyond the point where tax cuts increase government revenue. Some people support sales taxes because sales taxes discourage consumption and encourage savings and investment. While savings and investment are crucial to a free market, government policies should, to the greatest extent possible, be neutral between savings and consumption. Policies favoring savings distort the market just as do policies that encourage consumption. Supporters of the free market who pursue various tax reform schemes without also working to cut spending are putting the cart before the horse. The American people will not be free from tax tyranny until government is returned to its constitutional limitations. This will not occur until enough people reject the welfare-warfare state and embrace the moral, as well as the practical, case for peace and liberty.
The U.S. has the largest government spending problem of any government in history - over $31 trillion in debt (just for starters). Playing around with tax policy may work politically, but it will not solve the spending problem. Will America end the empire and bring the troops home? Will it curtail the massive welfare state for corporations & individuals? Will The Fed be shut down so that it can't print dollars and destroy their value? The spending problem will not be fixed if the answer to any of those questions is 'No.'
Although the narrative pushed by the US government and propped up by the mainstream media is that "Ukraine is winning," in a recent classified briefing to Congress the Pentagon is singing a very different tune. As the Biden Administration continues up the escalation escalator, shouldn't the American people hear what military experts really believe? Also today: Why F-16s? And...when a medical school goes "woke."
Jerome Powell Doesn't Know What Interest Rates Should Be (And Neither Does Elizabeth Warren)2/1/2023
By Chris Rossini Another day of central economic planning is upon us, and the Federal Reserve has raised interest rates once again. In other words - more price fixing. Senator Elizabeth Warren was not happy with the decision: What a situation.
Elizabeth Warren - who has no idea what interest rates should be - is criticizing Jerome Powell - who also has no idea what interest rates should be! This is what happens when the people accept price fixing and government central planning. It's the exact opposite of what should be. And what should be? Interest rates, like every other price, should be set by all of the individuals in the marketplace. No interference by third parties. Let's consider the basics... Imagine having a couple of friends over to watch the upcoming Super Bowl. You overhear two of them trying to strike a deal. One wants to buy a beer from another for $2. But, being a busybody, you interfere with the situation. You say, "No...you cannot sell that beer to him for $2. You must sell it for $4." What business is this of yours? You're not a part of the transaction. They're just trying to make a voluntary trade, that they both benefit from. They don't need your involvement. But alas, you threaten to throw them out if they transact on their own terms, and the deal never takes place. You have just distorted the (very small) economy that exists in your house. This is what government and the Fed do all the time; but on a MASSIVE scale. They distort the economy of hundreds of millions, and even billions of people! As time goes on, the distortions turn into bubbles. The bubbles get bigger and bigger each time. The necessary busts become ever more painful. The 2000 dot-com bust was bad, but the 2008 housing bust was worse. The 2008 housing bust was bad, but the upcoming bust will be worse! Elizabeth Warren believes that this economic pain can somehow be avoided. It cannot. The damage is done. The moment The Fed and government interfere is when the damage is done. The interference has already taken place. Now we wait... I'm sure that The Fed knows this, but they are trapped like every central planner throughout history ends up being trapped. Ultimately the point is reached where the distortions are so great, that there is no more kicking the can down the road. The Soviet Union was a perfect example of this. There was nothing they could do to live up to the utopian expectations that they had. The Fed may not be in as dire straits at the Soviets, but ultimately they will be. Ultimately, it'll be time to shut the doors of The Federal Reserve. Until then, let's not pretend that anyone knows what interest rates should be. It only perpetuates the disaster.
Yesterday the Biden Administration announced yet another military aid package to Ukraine including yet more powerful weapons. This comes as a new PEW Poll shows that Americans increasingly believe that the US is doing too much to help Ukraine. Also today: The US government investigates its massive aid transfers to Ukraine and finds no misuse of funds. Shocker!
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