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

10% Gold in Your Investment Portfolio; Get Ahead of the Crowd

Last week, Independent Strategy head David Roche said gold could hit $2,000 by the end of the year. And Rosche isn’t the only big name in the investment world who sees a shiny future for the yellow metal. Mark Mobius recently said he thinks gold could push above $1,500 as central banks move interest rates […]

READ MORE →

World Gold Council: Gold Could Shine as Heightened Risk Meets Easy Money

Gold Flows into ETFs for Second Straight MonthGold will likely shine over the next six to 12 months as heightened risk meets easy money — this according to the World Gold Council’s mid-year outlook. Gold ranked as one of the best-performing assets through the first half of 2019, beaten only by stock markets – which have also been supported by the turn […]

READ MORE →

Gold-Backed ETF Gold Holdings Chart Biggest Increase in Seven Years

Holdings in global gold-backed ETFs surged in June, charting their largest increase in seven years driven by increased geopolitical uncertainty, fear of an economic slowdown and widespread anticipation of looser central bank monetary policy. Globally, gold holdings in ETFs rose sharply by 127 tons last month, according to the latest data from the World Gold […]

READ MORE →

Poland Gobbles Up Gold, Plans to Bring It Home

Poland has added 100 tons of gold to its reserves through the first half of this year and plans to move at least half of its hoard from England to National Bank of Poland vaults in Warsaw. We’ve reported extensively on gold purchases by central banks, particularly China and Russia as those countries seek to […]

READ MORE →

China Adds to Gold Hoard for the Seventh Straight Month

For the seventh straight month, China added a significant amount of gold to its official reserves. The People’s Bank of China’s gold hoard grew another 10.3 tons in June, according to information released by the bank. Over the last seven months, the Chinese have increased their gold reserves by just over 84 tons.

READ MORE →

Comments are closed.

Call Now