Tyler Durden:
How would America ever survive without the central planners in the Obama administration and at the Federal Reserve? What in the world would we do if there was no income tax and no IRS? Could the U.S. economy possibly keep from collapsing under such circumstances? The mainstream media would have us believe that unless we have someone “to pull the levers” our economy would descend into utter chaos, but the truth is that the best period of economic growth in U.S. history occurred during a time when there was no income tax and no Federal Reserve.
Between the Civil War and 1913, the U.S. economy experienced absolutely explosive growth. The free market system thrived and the rest of the world looked at us with envy. The federal government was very limited in size, there was no income tax for most of that time and there was no central bank. To many Americans, it would be absolutely unthinkable to have such a society today, but it actually worked very, very well. Without the inventions and innovations that came out of that period, the world would be a far different place today.
It is amazing what can happen when the government just gets out of the way. Check out all of the wonderful things that Wikipedia says happened for the U.S. economy during those years…
The rapid economic development following the Civil War laid the groundwork for the modern U.S. industrial economy. By 1890, the USA leaped ahead of Britain for first place in manufacturing output.
An explosion of new discoveries and inventions took place, a process called the “Second Industrial Revolution.” Railroads greatly expanded the mileage and built stronger tracks and bridges that handled heavier cars and locomotives, carrying far more goods and people at lower rates.
Refrigeration railroad cars came into use. The telephone, phonograph, typewriter and electric light were invented. By the dawn of the 20th century, cars had begun to replace horse-drawn carriages.
Parallel to these achievements was the development of the nation’s industrial infrastructure. Coal was found in abundance in the Appalachian Mountains from Pennsylvania south to Kentucky. Oil was discovered in western Pennsylvania; it was mainly used for lubricants and for kerosene for lamps. Large iron ore mines opened in the Lake Superior region of the upper Midwest. Steel mills thrived in places where these coal and iron ore could be brought together to produce steel. Large copper and silver mines opened, followed by lead mines and cement factories.
In 1913 Henry Ford introduced the assembly line, a step in the process that became known as mass-production.
When hard working, industrious people are given freedom to pursue their dreams, great things tend to happen. The truth is that we were all designed to create, to invent, to build, and to trade with one another. We all have something that we can contribute to society, and when families are strong and the invisible hand of the free market is allowed to work, societies tend to prosper.
One reason our income tax system isn’t working like it should is that when it was created, the income was a lot lower than it is now, so most workers weren’t taxed very much. One person kept enough of their paycheck that they could support their family. As far as I know, the starting point for you having to pay income taxes hasn’t changed. This means that in 1913 the average worker who was paid $100 per week paid a very a small percentage in taxes. As time went on, inflation increased the starting wages, but the tax started at the same amount, so that an income of $500 per week now will take a much higher percentage of that amount. As inflation keeps rising, given enough time, a worker just starting out will pay the highest percentage tax.
The beginning tax should have been based on the poverty level and adjust with it. The politicians know they have an automatic tax increase with every increase in inflation without increasing taxes, so why would they want to do that?
Most of the states that don’t have an income tax are doing fine. The states and cities that have the highest taxes are the ones failing. Think about that. The politicians in the failing states and cities know that higher taxes don’t work. They have lived through the ups and downs of our country and our cities, and know that when taxes were lowered, things were better, so why are they still trying to raise taxes? Think about that.
@Smorgasbord: Your argument that non taxed states do better has been debunked. Of the 7 states without income taxes, TX, TN, FL, and NV are way below average in state economic growth per capita. NH, FL, TN, AK, and NV do worse than average in median income growth. TX, FL, TN, WA, AK, and NV have all had higher unemployment over the last decade. Looking at the International Trade Education Programs February report (a non-partisan research organization), high tax rate states are outperforming low and no income tax states.
Federal and income tax has morphed from what was understood as a way to pay for necessary government to a government entitlement.
Rep. Keith Ellison (D-Minn.), “The bottom line is we’re not broke, there’s plenty of money, it’s just the government doesn’t have it.”
Ellison, back in April, introduced legislation to institute a tax on financial transactions.
A pundit on one of the financial news channels pointed out that, as a practicing Muslim, Ellison opposes this unislamic practice.
He said, if this bill became law, it would be a sort of creeping Sharia in American business……You tax something to make it more rare.
But my main point is that Ellison looks at OUR money as HIS money.
He shouldn’t.
@Ronald J. Ward: #2
I guess it depends on what stories your read.
http://online.wsj.com/article/SB10001424052702304432704577349860656569348.html
http://www.newsmax.com/Rahn/publicunions-righttowork-incometax-budgetcuts/2011/03/29/id/391029/
http://www.laffercenter.com/wp-content/uploads/2012/09/2012-09-TaxesDoMatterLookAtStates-LafferCenter-Laffer-Moore.pdf
@Nan G: #3
It is his money. Look at any paper money. At the top it says, “Federal Reserve Note”. Since members of congress are FEDERAL officials, that means it is THEIR money. You should be thankful for ANY amount of THEIR money they let you have. LOL
@Smorg#1
“Most of the states that don’t have an income tax are doing fine. The states and cities that have the highest taxes are the ones failing. Think about that. The politicians in the failing states and cities know that higher taxes don’t work. They have lived through the ups and downs of our country and our cities, and know that when taxes were lowered, things were better, so why are they still trying to raise taxes? Think about that.”
When I do ‘think about that’ I think there are a lot of people up to no Good (corruption) on the public (Taxes) dime…
You are absolutely correct…. now, why is your very correct notion fought tooth and nail at every Liberal/Progressive/Socialist and RHINO level? As though the thought of the masses not paying as much in taxes would collapse the whole of the United States…a positive would be less corruption for sure.
@FAITH7: #6
Look at history. How many former free countries had the same problems as we do now, and are no longer free? Could this be the objective? I believe so.