Many years ago, the acronym TANSTAAFL became popular in conservative and libertarian circles. “There ain’t no such thing as a free lunch” expresses a simple economic truth, everything has a “cost.” From government spending, regulations, taxes, money printing, endless wars, etc., there is a cost—financial, economic, political, social, psychological—for all human actions, whether the actions are done by elected and nonelected government officials or private individuals.
This brings me to the income tax. We have until April 18th to file our tax return—or file an extension. For more than two decades Republicans have introduced a bill to replace the federal income tax, Social Security, and other federal taxes with a flat (sales) tax, a so-called Fair Tax. As simple as it sounds, the Fair Tax is relatively complicated—less so than the gargantuan federal income tax code--and would not address the real issue facing the economy, virtually all federal government spending is not authorized by the Constitution.
The Fair Tax just substitutes a national sales tax for income, payroll, and other federal taxes. Its advocates do not propose to reduce government spending by one dime. The Fair Tax proposal thus suffers from two major flaws—it is still a tax and spends the people’s money on the counterproductive welfare-warfare state.
That’s why pro-liberty Americans should be advocating TINSTAAFT--there is no such thing as a fair tax. All taxes are “involuntary exchanges.” Involuntary exchanges are the antithesis of a free economy—which is based on voluntary exchanges--and result is less prosperity. Think of it this way. What do the tax authorities produce of value? Nothing. Nada. Eliminating the taxman would free up resources for productive activities. The hiring of more than 80,000 IRS agents by the Biden administration is another dagger to the heart of any pretense that America is a free country.
If the American people kept all their income and paid for the things they needed and wanted to live and save for their retirement, they would have additional funds to make charitable contributions. America would be a free society. And our financial privacy would be secure!
Instead, the welfare-warfare state (WWS) has made tens of millions of Americans and crony businesses dependent on the trillions of tax dollars the US Treasury collects from the public each year, which are then spent by government agencies to provide individuals, families, and government dependent businesses with income and benefits.
In other words, the WWS is one big money laundering operation to keep tens of millions of Americans supporting Social Security, Medicare, Medicaid, farm subsidies, welfare payments, corporate grants and subsidies, and other domestic spending. And lest not forget the nearly one trillion dollars for the military-industrial complex in the federal budget, which line the pockets of military contractors, consultants, think tanks and perpetuate endless wars.
The literature about the fair tax, the income tax, and taxation in general, is so compelling that it is no wonder mainstream economists, academics, pundits across the political spectrum and of course the political elites, do not want to have a civil discussion about the best way to organize a free society.
This is the mission of my Substack essays, to offer alternatives to the WWS, which I outlined nearly three decades ago in Tax Free 2000. And in my memoir I trace my journey from a “moderate” supporter of the welfare state to a proponent of a tax free society and nonprofit institutions to replace entitlement programs. In addition, America’s endless wars must end otherwise as Albert Einstein remarked at the dawn of the nuclear weapons age, World War 4 will be fought with sticks and stones.
There is much as stake. Will you be a champion for liberty or just an observer as the proponents of the welfare-warfare state continues its relentless march? On Friday, I will discuss a tactic to challenge the WWS throughout the country.
On April 29th I will be speaking at the Libertarian Party Mises Caucus in Austin, TX, one stop in the Human Action Tour. See if there is an upcoming one in your area, https://lpmisescaucus.com/take-human-action-tour/.
My latest piece on the economy was published in Fortune, https://fortune.com/2023/03/27/recession-2023-layoffs-tech-finance-unemployment-outlook-fed-rates-murray-sabrin/ This is an update of my 2021 forecast, https://fortune.com/2021/12/09/next-recession-heres-everything-bubble-markets-2021-2022-covid-murray-sabrin/
Murray Sabrin, PhD, is emeritus professor of finance, Ramapo College of New Jersey. Dr. Sabrin is considered a “public intellectual” for writing about the economy in scholarly and popular publications. His new book, The Finance of Health Care: Wellness and Innovative Approaches to Employee Medical Insurance (Business Expert Press, Oct. 24, 2022), and his other BEP publication, Navigating the Boom/Bust Cycle: An Entrepreneur’s Survival Guide (October 2021), provides decision makers with tools needed to help manage their businesses during the business cycle. Sabrin's autobiography, From Immigrant to Public Intellectual: An American Story, was published in November, 2022.