Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Ron Paul: Republican Tax Plan Increases the Most Insidious Tax

  by    0   0

Ron Paul has identified an increase in what he calls the “most insidious tax” buried in the GOP tax reform bill.

A lot of Americans have put a lot of hope in tax reform. As Peter Schiff said in a recent Fox Business interview, the prospect of economic growth spurred by tax reform and other Trump policies have generated a great deal of optimism. But the question remains: can the GOP Congress deliver? And even if Congress does get a reform package passed, some question whether it will actually lead to the economic growth promised. Absent spending cuts, the tax plan will increase the federal debt even further. Evidence indicates high debt levels retard growth.

In a recent article published on the Mises Wire, Ron Paul identified another problem with the Republican tax plan. It actually increases the most insidious of all taxes – the “inflation tax.”

Paul acknowledged the tax plan has some positive elements such as increasing the standard deduction, creating a new family tax credit, eliminating the death tax, reducing the corporate tax rate, and lowering taxes on small businesses.

But the former congressman zeroes in on an element in the plan most analysts have missed – or ignored. It adopts what is known as the chained consumer price index (chained CPI) to determine future adjustments of tax brackets.

Chained CPI is a way of measuring CPI that understates inflation’s effects on our standard of living. It does this by assuming inflation has not reduced Americans’ standard of living if, for example, people can buy hamburgers when they can no longer afford steak. This so-called full substitution ignores the fact that if individuals viewed hamburgers as a full substitute for steak they would have bought hamburgers before Fed-created inflation made steak unaffordable.

“Chained CPI increases the inflation tax. The inflation tax may be the worst of all taxes because it is hidden and regressive. The inflation tax is not even a tax on real wages. Instead, it is a tax on the illusionary gains in income caused by inflation. The use of chained CPI to adjust tax brackets pushes individuals into higher tax brackets over time.”

Using chained CPI allows politicians to effectively increase taxes without adjusting rates. In other words, taxes go up while politicians are shielded from having to vote on a tax increase. Instead, the Federal Reserve does the dirty work. Fed monetary policy drives up inflation – on purpose. The stated goal is to boost inflation at a target of 2% per year. That doesn’t sound like much, but when you multiply that over time, it represents a significant devaluation of your money.

And eventually, you find yourself in a higher tax bracket even though your purchasing power hasn’t risen one iota. In fact, it’s fallen.

Paul said this is why we need to continue to push for an audit of, and an eventual end to, the Federal Reserve.

Since their creation in 1913, the Federal Reserve and the income tax have both enabled the growth of the welfare-warfare state, and the erosion of our freedom and economic well-being. The key to restoring our liberty and prosperity, as well as avoiding a major economic crisis, is reversing the great mistakes of 1913 by repealing the 16th Amendment, and auditing and ending the Federal Reserve.”

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

 

Photo by Gage Skidmore


Related Posts

Inflation’s Up; So What?

Here’s a strange headline for you: “Gold prices near daily highs despite better-than-expected inflation in October.” This headline is bizarre on a couple of levels. First, since when are rising consumer prices and good news? And second, why wouldn’t inflation be good for gold? You really have to buy into the mainstream narratives to write […]

READ MORE →

Powell Lectures Congress About Government Spending the Fed Facilitates

Fiscal 2020 started just like fiscal 2019 ended – with a massive federal budget deficit. And that has Federal Reserve Chairman Jerome Powell worried. In an ironic bit of political theater, Powell lectured Congress about the spending he helps facilitate. The budget shortfall last month was 34% higher than the October 2018 deficit, coming in […]

READ MORE →

Student Loan Bubble Blows Up Another $32.9 Billion in Q3

American consumer debt pushed to a new record of $4.15 trillion in September. Part of that equation – the continued surge in the levels of student loan debt. Student loan balances jumped by $32.9 billion in the third quarter this year, pushing total outstanding student loan debt to a new record of $1.64 trillion. Student […]

READ MORE →

Gold Mine Output Has Flatlined

Gold mine output has flatlined over the last several years and that trend appears to be continuing in 2019. In fact, some analysts believe we may be at or near “peak gold.” According to the World Gold Council’s Gold Demand Trends Q3 report, gold mine output fell slightly with total mine production coming in at […]

READ MORE →

The Gold Market Is Strong With the Potential for Growth

Gold is the third-most consistently bought investment globally. This was just one of many findings in the World Gold Council’s recently released consumer research report that revealed a strong global gold market with the potential for future growth. Globally, there are clear perceptions of gold as a safe, durable, traditional store of value. As an investment, […]

READ MORE →

Comments are closed.

Call Now