Debt and Taxes
The Federal Debt
The federal government is broke. The profuse spending by our elected officials put the federal government $30 trillion in debt with $168 trillion in unfunded liabilities. Politicians fear the national debt they created but have no ideas on how to fix it short of waiting for a worldwide economic collapse. The reputed great recession of 2007-2009 was not a recession but an economic collapse in America caused by U.S. political policies that led to the failure of economies in other countries. That was a precautionary warning to the impending worldwide economic collapse. As goes America, so goes the rest of the world.
The largest burden to federal spending is the litany of entitlement programs. In Fiscal Year (FY) 2021, half of all Americans (160 million) received some form of payment from the federal government. Entitlement programs made up 85% of the federal budget in FY 2021 with the interest payment on the national debt adding another 11%, leaving only 4% of the tax revenue collected to pay for all federal government agencies including DOD. President Biden’s proposed budget for FY 2022 is $6.01 trillion with $4.02 trillion going to entitlement programs. The expected revenue for FY 2022 is $4.17 trillion which will add another $1.84 trillion to the federal debt. The Congressional Budget Office’s (CBO) projected federal budgets through 2026 all anticipate deficit spending:
FY 2023 $4.64 Trillion Revenue, $6.01 Trillion Expense, $1.37 Deficit
FY 2024 $4.83 Trillion Revenue, $6.19 Trillion Expense, $1.36 Deficit
FY 2025 $5.04 Trillion Revenue, $6.51 Trillion Expense, $1.47 Deficit
FY 2026 $5.33 Trillion Revenue, $6.75 Trillion Expense, $1.42 Deficit
The year 2000 was the last time the federal government paid anything toward the national debt. Since then, our elected officials have added $24 trillion to the federal debt. When a real problem like the pandemic occurs, the Feds have no option but to print more money and add it to the national debt resulting in higher inflation rates. Another $6.3 trillion was added to the federal debt just since the pandemic began in February 2020. CBO and the White House’s Office of Management and Budget (OMB) project the federal debt will not exceed $40 trillion until 2030. Non-governmental organizations that track government spending anticipate the federal debt will exceed $40 trillion by 2026 with unfunded liabilities exceeding $200 trillion by 2030. Our elected officials have put America on the path toward hyperinflation which will invariably result in a final cataclysmic economic collapse. We must start now and all work together if the federal government is ever going to pay off its debts and become functional again.
Article I, Section 8 of the Constitution states; The Congress shall have Power To lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts, and Excises shall be uniform throughout the United States. While the Taxing and Spending Clause gives Congress the power to levy taxes, the wording dictates taxation is based on America’s economic productivity and it must be applied uniformly throughout the United States. The founding fathers rejected income tax and property taxes because of their concern that Congress would not provide uniformity and equal protection to all citizens. James Madison, in particular, expressed concern over income tax stating the spirit of party and faction would prevail if Congress could tax one group of citizens and confer the benefits on another group. Madison further expressed concern in Federalist #10 that property tax would give opportunity and temptation to a predominant party to trample on the rules of justice. How prophetic!
While the Constitution gives Congress the power to levy taxes, income tax was a significant change requiring an amendment to the Constitution which citizens vehemently opposed at the time. In 1913, the 16th Amendment not only changed America’s tax structure, but it gave Congress absolute power over its citizens. The federal government now imposes in excess of 100 taxes and fees on its citizens and workers pay nearly 70% of the total federal tax burden through income tax and payroll taxes. Americans also incur the additional hardship of numerous taxes from their states through income, property, sales, and other taxes and fees.
Politicians and economists offer no tax plan or economic structure to counter failed Keynesian policies which resulted in our out-of-control federal government. Currency Usage Tax (CUT) eliminates all current federal, state, county, and municipal taxes and fees. Eliminating income tax and payroll taxes not only increases a worker’s spending power but provides them with a greater opportunity to invest and save. Eliminating property tax means you can pay off your home or business sooner and the government no longer has the power to take your property through taxation. Eliminating all small business taxes and fees affords them the opportunity to hire more people, pay higher wages, and provide more goods and services. Eliminating corporate taxes will likewise allow corporations to hire more workers, improve wages, increase inventories, and create more products at a lower cost. The numerous U.S. companies that prefer to do business or have moved their headquarters overseas because of America’s high corporate tax rate will eagerly come back and companies from all around the world will want to join them. Eliminating the burden of convoluted taxation on America’s economy and its citizens is so significant that the likelihood of the politician’s perpetrated recessions may never be realized ever again.
Pay your fair share! A favorite slogan of the Democratic Party. Democrats use it to influence voters and liberals feel empowered through their self-righteous indignation. Currently, the top 5% of income earners pay 60% of all federal taxes with the top 2% paying 40% of that amount. Workers who earn more than $210,000 per year and married couples with income above $420,000 find themselves at the 35% federal tax rate. Combined with all other federal, state, county, and municipal taxes and fees these workers’ total taxes exceed 50% of their income in all states except Alaska. There are 15 states where their total taxation exceeds 60%, with New York at 63.71%, New Jersey at 64.49%, and of course California at the astounding 67.39%. By the way, California is $363 billion in debt.
America’s overregulated Keynesian capitalist economy and our current tax structure are no longer capable of paying off the federal debt without prolonged and dire consequences.
Under our current tax structure, the federal government could potentially pay off the federal debt by 2035 if it does the following:
1. Tax every worker at 90% of their gross income.
2. A 90% tax on the earnings of every business and corporation.
3. The federal government limits spending to a maximum of 50% of revenue acquired each year.
However, keep in mind the War Revenue Act of 1917 raised the combined tax rate on the highest income earners to 67% and then 77% in 1918 which contributed to the 1929 Great Depression.
USCF’s Better Tax Plan
USCF will replace all current federal, state, county, and municipal taxes and fees with the Currency Usage Tax. CUT restores America’s tax structure to its constitutional requirements of uniformity throughout the United States and is based solely on economic productivity. The Currency Usage Tax will generate $24 trillion each year for the federal government and states. This tax structure will permit the federal debt to be paid off within 4 years without any burden on citizens.