Taxes!
Our great nation was founded for many reasons, and the colonists’ disgruntlement with taxes was high up on the list to declare independence from Great Britain. Consider what American colonists considered onerous taxes, a 2% tax on tea that was the “straw that broke the camel’s back”.
However, the taxes that drove the American colonists to revolution were not the kinds of taxes we pay today.
As I get started on the taxes, I am putting the following background disclaimer in:
History, finance, and science have always been subjects I have loved since I was a young child, and I have had many years cultivating these subjects. How our money works for us or does not work for us is influenced by everything in the world around us.
I have been devoted to the history of the American colonists and the American Revolutionary War since I was that young child. I was totally captivated by this era, and to this day, I still am. The 4th of July is my favorite holiday of all of our holidays. What is interesting in having spent practically my whole life steeped in history is that, there are narratives on our history that are not true and there is the real history. The real history can be shocking and takes devotion to uncover and understand. I find, often times, both narratives blend into the other and intertwine truthfully at certain junctures, and one must learn to disseminate using a judicious mindset.
A Brief History of Taxes in Colonial America
Taxes are real and the disgruntlement over taxes has not changed in over 200 years. But the types of taxes we pay today are completely different than the taxes that led the American colonists to declare independence from Great Britain as declared July 4, 1776, and through revolution against the powerful Great Britain empire.
The taxes on the colonists largely consisted of taxes related to the importation of goods into the American colonies. These 2 types of taxes were trade tariffs and excise taxes on imported goods.
These tariffs and excise taxes on the colonists represented 90% of the tax revenue the British collected on the Colonists and keep in mind, the American colonies were a British Corporation.
Trade tariffs affect the price of imported goods. Excise taxes are taxes on certain products. For example, the excise tax on whiskey raised a lot of taxes for the American Government from the start of our great nation.
Trade tariffs and excise taxes in Colonial America in the years leading up to the American Revolution brought in 90% of the American colonies’ tax revenue to Great Britain. The colonists overall individual tax rate was 1.00%—1.50%. The addition of the excise tax of 2% on tea in 1773 was a “straw that broke the camel’s back” of many grievances. The Boston Tea Party likely sounds familiar to you.
Trade tariffs and excise taxes in 2024 America represents 1% of the tax revenue our Government collects today. The remaining tax burden is on American citizens’ income and everyday life. The taxes are a long list of direct taxes on the American citizen.
Note: There were additional taxes levied on the colonists leading up to the Declaration of Independence, but I won’t detail this here. These links are very interesting if you want to delve in to this history. It is very interesting and we are not taught any of this.
The colonists were very unhappy about what they considered excessive taxation, and for being taxed without American Colonial representation in the British Parliament.
The taxation in our country today is completely different than American colonial times when taxes sparked a revolution of the colonists against the very powerful British Empire. I am not certain that we the people’s interests are actually represented in Congress in our current era. Do you believe your interests are represented in Congress through your Congressional representatives?
The Taxation of Our Life Today
Everything we eat, buy, and do, is taxed.
We are taxed on our money when we receive it, spend it, keep it, invest it, and when we die with it.
When we go to work, we get in a car we are taxed to own. We pay gasoline/energy taxes to drive the car. We pay toll taxes to drive on roads, highways and bridges that we paid taxes to build and maintain the roads, highways and bridges; and there are already billions of dollars we paid in as taxpayer dollars to maintain our roads, highways and bridges—how is that going?
You go to an office that is taxed to exist, in a corporation that is taxed to to do business. There are very likely additional “permits” taxes for the business as well.
You are paid a paycheck which also has a 15.3 % payroll tax in which your deduction is 7.65% from income you earned and 7.65% paid by your employer-in an employee payroll tax. This is the FICA tax, i.e. the Social Security tax and Medicare tax. This total payroll tax of 15.3% is part of your total compensation package, whether you realize it or not. Ditto on self-employed: 15.3% of income goes to the Government for Social Security and Medicare taxes.
Income tax rates go to 37%. The more money you make, the more the Government takes in income tax.
When you go home from work, you go to a home which you are taxed every year to own, using money you were already taxed on.
I am not even including state and local taxes.
The Federal tax code is over 2,600 pages and does not include over 9,000 pages of IRS regulations that were never passed into law, created by some unelected bureaucrat sitting in their office, that we still have to abide by.
If you read that tax law from cover to cover, and did your taxes according to these 2,600 pages, you would probably go to jail because the 2,600 pages don’t include the over 9,000 pages of IRS regulations.
If you miss a word, misinterpret a word, or forget about a word in the midst of the 5 million words that is our Federal tax code, you may have to defend yourself in an audit. You might have to hire an accountant and an attorney to review an additional 70,000 pages of precedents pertaining to the tax code and bureaucratic regulations.
The IRS has the authority to claim you did something wrong, internally adjudicate your defense that you don’t get to be present for, and unilaterally decide to reach into your bank account and take your money or put liens on your home and your business without even going before a judge or getting a warrant,
So much for: “for the people by the people.”
Taxation in the USA Wasn’t Always This Way
What I have just explained represents a tax creep on us since the creation of the Federal Reserve central bank system in 1913, and the passage of the 16th Amendment to the US Constitution in 1909.
The 16th amendment provided for a tax on income from American citizens for the first time in the history of America as a nation. Remember, amendments to the US Constitution must be ratified by 2/3 of the states to become part of the US Constitution. From the passage of the 16th amendment in 1909 to February 1913, 2/3 of the states had not ratified the income tax. Some states ratified, but not 2/3 of the states required.
Tariffs and excise taxes funded Government and services prior to the Federal Reserve system and the 16th amendment implementing a tax on American citizens’ income beginning in 1913 to current day. We have this immense tax burden on our money from an amendment that was never ratified and is not even constitutional per the US Constitution. The US Constitution does not allow for income tax on the people. For more analysis, see Part 6: How did “We the People” End Up with a Monetary System that Doesn’t Benefit Us?
In the last few years, our Government via the US Treasury and in both the Executive Branch and Congress have talked about adding additional taxes in the way of:
Taxing you on unrealized gains on your investments.
Taxing you on the unrealized gain on your home, which you already pay tax on every year to own and live in.
So far these 2 “ideas” to generate additional tax revenue from the American people have not materialized as new legislation, IRS code or bureaucratic regulation, thank goodness.
Our Founding Fathers are likely rolling over in their graves.
Taxes are part of our monetary, banking, and financial systems. We are not taught about how each of these systems work either. These 3 systems are the backbone of our personal financial success.
Can You Limit Your Tax Burden?
What is interesting to me is that, in our country, we have never had a monetary system, banking system, or financial system that was in alignment to our Constitution for the united states of America ratified in 1789. The Constitution for the Republic of the united states of America.
Start by reading my Our Monetary System is Changing series:
Part 1: Money is an agreement.
Part 2: Our money is fiat money created by the private corporation, the Federal Reserve central bank system, using fractional reserve lending in the commercial banking system we use.
Part 3: The Federal Reserve central bank system, fiat money, fractional reserve lending & how the American taxpayer plays into this monetary system.
Part 4: How the World Turns: American Taxpayer Money at Work Across the World; Who Profits?
Part 5: Do Monetary Systems Change? Yes, They Do!
Part 6: How did “We the People” End Up with a Monetary System that Doesn’t Benefit Us?
Part 7: The Future of Our Monetary System: Prosperity for You!
Part 8: How You Can Make Our New Monetary System Work For You!
Our Founding Fathers Did Not Fight for This Onerous Tax System
Maybe in the future,
we can have a monetary system not based on debt but real world assets: debt-free currency that allows us to achieve a more stable and prosperous financial future for all of America-the people and our country.
we can have a banking system that serves the people in growing their wealth versus the in-debting of the American people, creating inflation and economic instability: Market crashes, depressions, and the bankrupting of this country.
we can have a financial system that is transparent, secure, accurate, lightening-fast, and works to create wealth for all of the American people and our country.
A Special Note for You: Mary and MSM Advisory, LLC will return to our “Investing Series” in August 2024, so look forward to it.
Your thoughts and questions are always welcome!
MSM Advisory, LLC. is a professional practice designed to offer you the customized financial planning advice, strategies and implementation to make your dreams come true. Money matters and this is what the money is for… your vision for your life coming to life… for you.
Comments