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Real Money, Real Taxes, and Freedom

By Gordon Francis Corbett

Specie is the raw material from which men manufacture genuine money.  It must be valuable in itself, relatively rare, and capable of returning the purchasing power the owner used to buy it.  Over the centuries, precious metals' value has proven very durable.

Gold can be made into jewelry, dental fillings, sculpture, and many other valuable things.  Today we can add usefulness in electronics.  Silver and platinum also qualify as specie because they have intrinsic value, are rare, and return equal value to their purchasers.

Like the New York Mafia underboss whom young Vittorio Andolini kills in the fictional "Godfather Saga," taxers "dip their beaks" in people's earnings.  Some taxes are legitimate because they do not touch the money's purchasing power, and because the public guardians use their revenue to protect the citizens' rights.  Alas, most do not.  

Most of today's legislators want to play "Robbin' Hood."  They take money from everyone to buy votes from favored groups.  To make the robbery almost undetectable, they use a new version of a very old trick.  Back in ancient times, some kings clipped the edges of their coins, melted the clippings, and turned them into "new" coins.  Suspicious shopkeepers weighed the old ones and found that their coins had "shrunk."  Consequently, at least one of these old rulers suffered the separation of his head from his body, which made continuing to rule terminally difficult.

The French Revolutionaries tried something different:  the "assignat."  These paper bills were some of Europe's earliest paper currency.  The Revolutionaries understood that running the printing presses would let them seize all of the purchasing power that France's nobles and middle class possessed.  The resulting hatred helped to separate Robespierre from his head.  As Ross Perot might interject at this point, "Is there a pattern here?"

Warring governments usually inflate their currencies.  We have had two Wars of Independence--1776 and 1861.  Both involved lots of inflation.  The 1776 war's American currency was the Continental, whose eventual total worthlessness, you will pardon the verb, "coined" the saying, "not worth a Continental."  The 1861 war featured two American currencies.  The Union printed the "Greenback" to help the Union wage-earner pay for Mr. Lincoln's War.  The Confederacy printed very many more Confederate banknotes.  They turned the mildly prosperous Southern economy into a complete shambles.  

Inflation is a tax.  It always has been a tax, and it always will be nothing more than a tax.  We can scarcely wonder why, according to one wag, Johann Gutenberg is the patron saint of the Federal Reserve System!  

Some people buy specie to shield from inflation their already-taxed purchasing power, but modern governments smash that "shield" with a capital-gains tax.  Nominally, a capital-gains tax takes a portion of an investment's true appreciation in value.  Unfortunately, our leaders have not indexed their capital gains tax to inflation.  So, when owners of specie declare its sales on the appropriate IRS tax-return form, and pay the amount demanded, they lose portions of their investments' true appreciation and of their original purchasing power.  

Paying taxes lets us equip and pay the people who protect our rights.  Sadly, those payments also buy many actions that violate the letter and spirit of our Constitution.  Returning our wayward public servants to the Framers' Constitutional cage will let us keep some eighty per cent of the money we lose in Federal taxes.  Repealing the Sixteenth Amendment, thereby abolishing the income tax, might return to us ten per cent more.

Repealing the Sixteenth Amendment would also give us a new birth of freedom.  Our public guardians would no longer have an excuse to violate our financial privacy.  Neither could they put innocent businessmen on "enemies' lists" for supporting unorthodox political causes or parties.  Righteous citizens could stand on their hind legs and demand their rights without fear.

These goals are not impossible.  Organizations and political parties working for them are ready to receive our help.  

All they need is enough.

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