Throughout history, there has always been tension between employers and employees. Employers want to make as much profit as they can and employees want to earn as much income as they can.
The United States started out as an agrarian economy as the following charts indicate:
Percentage of American Labor Force in Agriculture
|yield per acre||15||31|
|yield per acre||147||438|
As more and more people became employed in non-farming jobs, the disparity in bargaining power became evident. This led to the rise of labor unions and union membership.
According to USA Facts:
- In 2020, 14.3 million people or 10.8% of US employees were union members. That’s down from 20.1% in 1983;
- In 2000, 20.1% of the 19.2 million people employed in production, transportation, and material moving occupations were unionized;
- While private-sector union membership fell from 9% in 2000 to 6.2% in 2019, it edged up slightly to 6.3% in 2020;
- Similarly, public-sector union membership dropped from 36.9% in 2000 to 33.6% in 2019, then rose to 34.8% in 2020;
- Seven states account for over half of the country’s 14.3 million union members: California, New York, Illinois, Pennsylvania, Ohio, Michigan, and New Jersey.
Abraham Lincoln, himself a laborer for many years, said, "Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."
We all know that if you want more of something you reward it and if you want less of something you punish it.
Taking money through taxes is a punishment. Instead of rewarding labor, the Ruling Class and their minions in Congress tax it.
The “higher consideration” given to labor by the Ruling Class and their minions in Congress is to see that labor pays increasingly higher taxes.
The federal payroll taxes that fund Social Security and Medicare are the most regressive taxes imposed on American workers. These taxes start at the first dollar a worker earns, and continue until the worker earns $142,800. It doesn't matter how many children you have or any other mitigating factor. If you can cloud a mirror with your breath and you’re working, you pay the tax.
Then you have the income tax. Obviously, an income tax is levied against the money people receive in exchange for their labor. Since very few people have inherited large amounts of money, most people get the money they need to live through their labor.
A third way to tax labor is not as obvious. That makes it one of the income/payroll tax system’s favorite features in the eyes of the Ruling Class and their minions in Congress.
For example, many economists believe that labor really pays most of the 7.65% of the payroll tax paid by employers in the form of reduced wages. Unless you’re talking about a government entity, the amount an employer can afford to pay in wages and benefits is based on its net income. Most companies that experience an increase in net income will increase wages for its workers.
Another example is when government imposes expensive regulations and higher taxes on corporations. Understand that most of the people imposing these taxes and regulations have never had a job in the private sector, other than babysitting or mowing yards when they were young. They don’t understand how business works, so they assume that somehow the corporations are just supposed to pay the increased costs.
When corporations respond to higher taxes and more regulations by increasing prices, reducing wages, laying people off and cutting dividends to shareholders, the politicians are indignant. They invariably attack the corporations for being mean, greedy, selfish and uncaring. It’s like punishing a puppy for yelping after you’ve stepped on its paw. They simply can’t understand a basic economic truth—that one way or another, individuals pay every penny of a corporate tax.
How much do these “disguised taxes” cost American workers? It is very hard to calculate and that is why the bureaucrats love it. Their salaries are not affected by increased taxes and regulations. They do pay higher prices for goods and services but most don’t even realize it.
LABOR AND THE FAIRTAX
By taking money we have earned, all taxes reduce our ability to consume. However, if you want to encourage labor, then it is time to stop taxing it. If you want more labor, reward it. The FAIRtax taxes your consumption, not your labor. The more money you make, the more you keep. With the FAIRtax, you pay taxes only when you make retail purchases of new goods and services. And the prebate ensures that no one pays taxes on their basic necessities.
Congress and the D.C. Elites think nothing of punishing labor. They ignore the effect of their policies on the family of four making $30,000. That family might not pay any income tax, but they lose 7.65% of their earnings to federal payroll taxes. The DC elites punish that family’s labor by reducing the amount they have available to spend on basic necessities from $30,000 to $27,705.
Under the FAIRtax, the family would have the entire $30,000 to spend, and the prebate would let them spend all of it tax free. The FAIRtax would result in them having $2,295 more to spend—nearly an 8% raise. Then factor in the fact that prices will likely go down by at least 10% and the family now can purchase $33,000 of goods for $30,000.
This means that, under the FAIRtax, this family that relies on its labor to live is effectively $5,295 a year better off. And by not taxing used items, the FAIRtax gives this family a way to lessen the amount of tax they would pay at the cash register, thereby making even more of their income available for consumption.
If the politicians really want to reward us, they should immediately stop punishing those of us who work for a living and depend on our labor to survive. As columnist George Will said, "Money is time made tangible - the time invested in the earning of it. Taxation is the confiscation of the earner's time. Although some taxation is necessary, all taxation diminishes freedom."
Celebrate Labor Day, but also realize that no matter what the Ruling Class and their minions in D.C. may say, you can see their true colors in what they do. The fact that they keep the income/payroll tax system in place and use it to punish those of us who rely on the fruits of our labor to live tells us all we need to know about what they truly think of us “little people” who are outside of their favored circle.
What can each of us do?
We can write letters and make calls to our elected representatives demanding that if the government really wants to eliminate the burden of filing income tax returns, they should enact the FAIRtax and do away with tax returns altogether.
The great 18th century Irish statesman Edmund Burke made a statement that applies in many ways,
“Nobody made a greater mistake than he who did nothing because he could do only a little.”
If you want to prevent the IRS from being further weaponized to punish those of us who may object to the D.C. opinions and dictates of what is good for us, then help us PASS THE FAIRTAX!
The IRS will be gone and we will pay our taxes when we make purchases. WE and not D.C. Elites will decide how much federal tax we pay!
If you have friends who don’t know about the FAIRtax, send them to FAIRtax.org. Have them watch the white boards under “How It Works” and, if they agree, ask them to please join us.
Then contact your Members of Congress and the President and demand that Congress pass -the FAIRtax—the only fair tax.
Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:
“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
Is it hopeless? When confronted with a seemingly impossible problem, remember the statement attributed to the author George Bernard Shaw who wrote, You see things; and you say “Why?” But I dream things that never were; and I say “Why not?”
Isn’t it time for us to ask, “Why not?”
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