Middle- and working-class Americans are also the main victims of the Federal Reserve’s hidden inflation tax.
American Compass, a think tank promoting a conservatism lacking even a rhetorical commitment to free markets, recently called for Republicans to support tax increases. The organization claims a GOP embrace of higher taxes will enable the uniparty’s left (Democratic) and right (Republican) wings to create a deficit reduction plan balancing tax increase with spending cuts.
American Compass is correct that both parties need to prioritize deficit reduction. The 35 trillion dollars (and rising) national debt is a big threat to prosperity and liberty in America. However, history shows that any “bipartisan” agreement to raise taxes and cut spending results in higher taxes and higher spending. The classic example is the deal President Reagan made with congressional Democrats to cut spending by three dollars for every dollar in tax increases. Congress eagerly authorized the higher taxes and then disregarded its promise to cut spending.
The only “cuts” most members of Congress will agree to do are “reductions in the projected growth of future spending,” while Congress regularly uses “emergency” spending bills to violate “spending caps.”
The Biden administration and the then Democratic controlled Congress increased taxes on many Americans in 2022 when they expanded the Internal Revenue Service (IRS) in order to crack down on “wealthy tax cheats.” As many predicted, the expanded IRS began using its new resources to target middle-class taxpayers, who cannot afford to pay lawyers and accountants to help them maneuver through the tax code and thus are likely to just write a check for whatever the IRS demands.
Middle- and working-class Americans are also the main victims of the Federal Reserve’s hidden inflation tax. This tax will keep increasing as long as the government’s reckless spending forces the Fed to monetize ever higher levels of government debt. Anti-tax conservatives and all who value individual liberty and peace should join the movement to audit and then end the Federal Reserve.
Instead of “negotiating” over what taxes to increase, conservatives should join with antiwar libertarians to immediately demand cuts in warfare spending. America cannot afford to waste billions of dollars that serve no purpose other than enriching the military-industrial complex. Congress should then shut down all unnecessary federal agencies including the NSA, TSA, FBI, DEA, CIA, and Department of Education.
The money saved from these cuts should be used to protect those dependent on federal welfare and entitlement programs as those programs are phased out. Responsibility for providing aid can then be transferred back to private charities, churches, and community-based organizations. Private, locally controlled organizations can more efficiently and compassionately provide care to the needy than can a large government bureaucracy.
Government deficits are a symptom of the abandonment of the moral truths of individual rights and limited government for the immoral lies of the welfare-warfare state and the fiat money system that underlies it. Therefore, fiscal conservatives will never succeed in limiting government spending unless they join with libertarians in seeking to restore the understanding that the prohibition against force and fraud applies to government as well as private individuals. If you cannot use force or fraud against your neighbor to provide for yourself, your family and friends, or the Ukraine army, then neither can the government. The prohibition against fraud also applies to the legalized counterfeiting undertaken by central banking.
This article first appeared at RonPaulInstitute.org.
