Common Sense Tax Reform

From http://libertyrevival.wordpress.com/2010/09/22/common-sense-tax-reform/

Common Sense Tax Reform
September 22, 2010 by Keith Gardner

Replace income and payroll taxes with a progressive sales tax. The Fair Tax is such a proposal. The Fair Tax is a sales tax to replace income and payroll taxes. It also pays everyone a prebate of approximately $200/month. This is a form of agrarian justice. It gives everyone the value of a minimum number of resources. It taxes those who consume excessively. It is difficult to avoid and doesn’t punish those who save and invest. It reduces demand for natural resources and increases supply of natural resources. It makes the cost of living more affordable for everyone.

If you replace income taxes with sales taxes, you also make American labor more competitive. An income tax places the burden of taxation on American workers. If you buy an American product or service, you are paying for a hidden tax, the income tax. If you buy an foreign product or service, you’re not paying that hidden tax. A sales tax places the burden of taxation on domestic and foreign products so the burden of taxation distributed among all goods and services and not just what is provided by American labor.

Make property taxes progressive. Don’t cut property taxes. They serve a good purpose of preventing wealthy people from buying up all the land and driving up the price. They also help prevent boom/bust cycles in real estate. You do want to significantly increase property taxes on the undeveloped land value, reduce the property taxes on the developed value, and offer a significant personal deduction for a person’s primary residence. This shifts the burden of property taxes on those who buy and hold land without using it, who take the most valuable land, or who use it for commercial purposes. It shifts the burden of taxation away from your average home owner who only owns one home in the suburbs or a rural area. It helps keep property prices from rising. It helps keep property tax rates stable. It puts people to work developing land in prime locations. It makes owning a home affordable for everyone.

Make business/corporate taxes progressive. Make the tax rate 0% for small business. Make the tax rate progressively higher for larger business. This helps guard against monopoly, drives innovation, and provides jobs. It gives people the ability to compete.

Finally, Glenn Beck is a liar. You want to increase money supply. If you shrink money supply, as what is happening now, you kill economic growth and cause an economic depression. During the Great Depression and other economic depressions in America, it was because the money supply was reduced. If a dollar gains in value, it is because the money supply was reduced. A strong dollar is economically destructive. Money is just a unit of trade. You want to increase the money supply as the economy grows and to allow the economy to grow. You want a mild inflation rate. You want to increase the money supply. You want the banks to increase the money supply. Our dollar has gained strength during this economic depression because the banks aren’t adding to the money supply. The banks have reduced money supply. The reason why homes dropped in value is because there just simply isn’t as much money in circulation as there was 2 years ago.

We need to reform the money system where the government creates money debt-free and spends into circulation in lieu of taxation, like the Lincoln Greenback, so that banks can’t cause another economic depression.


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Milton Friedman Gave Bill Still Bad Advice
August 15, 2010 by Keith Gardner







While Milton Friedman is correct that the real problem is fractional reserve lending, he gave Bill Still completely bad advice when he suggested that money supply be fixed per capita. Fractional reserve lending gives private banks the primary power to expand and contract money supply and profit on the expansion and contraction of money supply. It is normally inflationary, which is good, but banks can add a certain amount of volatility and can still cause deflation if they decide not to issue enough new credit, which is what we are seeing now.

Any promoter of debt-free money system knows the key issue is the management of money supply. Bill Still is completely correct that it is about who controls the quantity, the supply of money. By managing the supply of money, you regulate the value of money. The value of money will change if held in fixed supply due to economic growth, economic collapse, population growth, or population collapse. Velocity or how long people hold money without putting it to use, wealth concentration, and export of money are additional related factors. You want to hold the value of money ideally constant so that markets, especially capital and credit markets, don’t experience market distortion due to money supply. Inflationary expansion is usually fine since it tends to promote economic growth and is corrected/paid off with economic growth, though inflation can be problematic with credit markets and debt-based monetary systems.

If money supply is fixed per capita, deflation and inflation can still result because only population is being considered. If people become more efficient at producing goods and services and if the population is fully employed, deflation is going to result. If wealth concentrates, people can become unemployed since those people won’t have money to trade among themselves, and deflation is going to result. Every monetary economist, other than those laymen brainwashed by the Austrian Cult of Economics, knows deflation is destructive. If money increases in value, people hold onto money rather than use it. Everything gets devalued except the money. People lose their homes, farms, businesses, and jobs during deflation.

Fixing money supply per capita is the most retarded thing Milton Friedman has ever suggested. I think Milton Friedman gave intentionally poor and sadistic advice to mislead Bill Still. Milton Friedman knows better. Milton Friedman knowingly gave the bad advice. Never trust an economist when it comes to monetary issues. You are going to have to understand inflation and deflation, what causes inflation and deflation, and what inflation and deflation causes.

The causes of inflation and deflation are numerous. The only way to manage money supply to prevent deflation and inflation is through monitoring the economy for deflation and inflation and signs of deflation and inflation. You have to monitor price indexes, population growth, employment, and other indicators. That is the primary problem, among many others, with gold as money. You can’t manage the supply. If the economy grows, gold increases in value, and the economy collapses from the deflation. The supply and demand of gold distorts the supply and demand of all goods and services in the free market.

With a debt-free money system, one can even cause and cease inflation at will to encourage velocity, lending, and investment or to provide emergency deficit spending without making the tax payer pay interest to bond holders. Inflation caused by excessive expansion of money supply is only destructive if it is unpredictable, excessive, financed with debt, or results in systemic bad investments.

The primary concern is preventing deflation. With expensive money or fixing money supply per capita, you’re not going to prevent deflation, you’re going to cause deflation. Fixing money per capita is just as bad as a gold standard.

I had other concerns about the interview. However, that was the main one. I wish Bill Still would focus on what debt-free money and ending fractional reserve lending means. It means we can use the monetary expansion necessary to end fractional reserve lending and to prevent deflation to pay off the national debt and to end income taxation.

The good news is that it is nice more people in the liberty movement like the radio show host are awake to the gold standard scam. Looks like we’re going to have to also warn people about the scam of fixing money supply per capita.