If the income tax was abolished, would the economy collapse?

[hotbrownsauce]

If we changed nothing but to abolish income tax. The economy would tank very fast. (Less then a few years)

 

[fj45lvr]

It would SUCK in the short-term, but would be significantly better in the long-term.

Think of it like a heroin addiction -- just because getting clean is going to be hell for awhile doesn't mean you should keep shooting up.

No....it will not suck in the short-term.

Even with the income tax we are DOOMED (we have too much debt and unfunded liabilities)....freeing up this resource for the people will be helpful to them and the REAL economy (the economy that actually PRODUCES).

The fiat money system they are using against us doesn't need tax revenue!! But hopefully the currency will fail and the people can once again use REAL money!!

 

[Acala]

not really

Our money is backed by debt.

For currency to be "backed" that means it can be exchanged at a fixed rate for a commodity of some kind. When our currency was backed by gold, you could exchange it for a fixed amount of gold. That is what "backed" means - redeemable in some hard asset at a fixed rate of exchange. But our currency now has whatever exchange value the market gives it at this moment and nothing more. It is not backed by the right to exchange it for a fixed amount of any asset. If the market discounted it to nothing tomorrow that is what you could exchange it for - nothing.

What does "backed by debt" even mean?

Debt is meant to be repaid.

Not government debt. Rolled over maybe. But not repaid. Remember, virtually our entire money supply is created by borrowing it into existence. If all the debt were repaid there would not be any money. Debt-based fiat currewncy depends on the debt NOT being repaid. The plan is to NEVER be out of debt. In fact, the plan is to have debt increase forever to keep the money supply expanding.

The government gets the money to repay the debt from taxes.

The government spends more than it takes it. It doesn't use taxes to pay ANY debt.

But we need to come up with a credible argument why ending the income tax is in people's own self interest.

how about "you get to keep more of the money you earn".

I think most people think the earth will stop spinning if there is no income tax.

True. This is how I present it: you eliminate the personal income tax incrementally while you raise the corporate income tax to cover the difference. Meanwhile you dramatically reduce the size and cost of government and sell its assets to buy people out of programs like SS and Medicare, then shut them down. At the end of the day people are richer, the world empire has been dismantled, government is back to its proper limited role, and corporations as a business form are on their way out.

 

[LibForestPaul]

Our national debt is theoretically supposed to be paid off by future tax revenue.
No it isn't. The debt is theoretically supposed to continue to grow forever. That is the horror of Keynesi

anism.

Remember that, the debt will never be paid off. Continuing inflation, debt slavery. Until the system collapses.

 

[LibForestPaul]

If the income tax were abolished...

1. High temporary unemployment, mainly of federal employees.
2. Collapse of government pension system.
3. Collapse of a number of crony corporations.
4. Health and welfare emergencies for a small number on government aid. (elderly without family, families without jobs AND savings.)
5. Spurning of many small company startups.
6. Spurning of many new charities.
7. Massive spending stimulus, 30% pay raise to millions of Americans.
8. Huge increase in personal liberties.
9. Probably a great leap forward, America would likely enter a new renaissance. Huge amount of extra capital in millions of hand.
10. The great unknown...what would the International Banking Cartel's reaction be to having it debt collateral be set to nothing. I would say World War III no doubt.

 

[Dunedain]

The local economy of Detroit would collapse (where I live).

Federal welfare payments are the main source of income here. Food stamps, and Medicaid are also in the running. There are generations of ghetto welfare queens that have taught their children the secrets of getting on the government dole. What would they do without the income tax of the average american footing the bill.

 

[treyfu]

The government would collapse. The economy would thrive.

 

[denison]

anism.

Remember that, the debt will never be paid off. Continuing inflation, debt slavery. Until the system collapses.

It will be paid off one way or another. i.e. collateral.

 

[Acala]

Not

It will be paid off one way or another. i.e. collateral.

There is NO collateral for the Federal debt. Treasury paper is UNSECURED. If the Federal government doesn't pay there is no recourse to the holders of the debt. Except military force, of course, which is not a legal remedy.

Do you think that if you are a holder of government bonds and the government refuses to pay that some court is going to award you possession of some government asset? If you think that, you are mistaken.

 

[xd9fan]

no we are the economy
painful yes but collapse...no

 

[Nationwide]

It's a scam

No. You have much to learn yet, padawan. The federal income tax does not apply to most (90%) Americans due to the limited nature of INCOME and restrictions of fundamental law. Begin your education here LostHorizons I make plenty of money yet pay 0 income tax and have no IRS problems.

 

[Nationwide]

It's a scam

dup

 

[osan]

I know the first thing libertarians will say:
No way! The economy would get stronger!

In time, yes.

Our national debt is theoretically supposed to be paid off by future tax revenue. But what if that tax revenue ends? What will happen to all of the people who hold those bonds, notes and T-bills?

Given he way things are done now, just print the cash and pay them off. They will not be any worse off.

How will they get paid back? How would the economy respond if the tax revenue dries up because the Marxist income tax is abolished?

Income tax is not the only revenue stream.

Would the federal government (and state governments if they repealed their income taxes) have to hold a big garage sale? Put all of their possessions for sale?

Well, some of that may be in order. Elimination of the myriad "services" would cut the debt drastically in an immediate fashion.

This is the type of thing that should be discussed, so that skeptics will see that it repealing the income tax is realistic.

I also believe that the only sane thing for the American people to do is to repudiate the national debt in toto.

 

[MN Patriot]

What does "backed by debt" even mean?

If you want to exchange a Federal Reserve Note at the Fed, do they give you gold or silver? No, they give you another FRN. Circular monetary system. Just like you say...

Originally Posted by MN Patriot
Debt is meant to be repaid.
You:
Not government debt. Rolled over maybe. But not repaid. Remember, virtually our entire money supply is created by borrowing it into existence. If all the debt were repaid there would not be any money. Debt-based fiat currewncy depends on the debt NOT being repaid. The plan is to NEVER be out of debt. In fact, the plan is to have debt increase forever to keep the money supply expanding.

Thats right, government debt, rolled over, which backs our money. But then if income taxes dried up, and government revenue shrinks, how will those holders of government debt respond? Will they support the ending of income taxes, if it means they will lose their investment in government debt?

Eventually the rolling over has to come to an end, perhaps the geniuses who didn't see the housing bust won't see the end of the rolling over.

The government spends more than it takes it. It doesn't use taxes to pay ANY debt.

You wrong, government surpluses are used to pay off debt. How does government get surpluses? From income taxes and less spending(like THAT will ever happen with the collectivists in control). If income taxes are ended, there will be no surpluses. No surpluses means debt isn't repaid. Defaulted debt is viewed as bad. Therefore people who hold government debt will oppose ending the income tax.

We need to anticipate the opposition to ending the income tax from the financial sector who thrives on government spending and debt.

 

[MN Patriot]

I also believe that the only sane thing for the American people to do is to repudiate the national debt in toto.

Yes, that may be necessary, but once again, we need to anticipate how the financial sector, and the political Establishment will respond to ending the income tax and repudiating the debt. They will claim the sky will fall, the earth will stop spinning, etc.

We need good arguments and good strategy to deal with their opposition.

 

[MN Patriot]

No. You have much to learn yet, padawan. The federal income tax does not apply to most (90%) Americans due to the limited nature of INCOME and restrictions of fundamental law. Begin your education here LostHorizons I make plenty of money yet pay 0 income tax and have no IRS problems.

Erwin Schiff,, Peter's dad is in prison for 13 years for following the same path as LostHorizons.

I am very sympathetic to the cause, but it won't succeed until the income tax is repealed.

 

[Danke]

Erwin Schiff,, Peter's dad is in prison for 13 years for following the same path as LostHorizons.
.

Wrong.

 

[aravoth]

No it isn't. Our money is not backed by anything.



No it isn't. The debt is theoretically supposed to continue to grow forever. That is the horror of Keynesianism.



They will not be paid back anyway. There is no conceivable way that our national debt will be paid off. Ever. It will end in default or hyperinflation. Bond holders who do not realize that will suffer the same consequences as anyone who makes a bad loan - they lose their money.



It would explode with productivity and wealth.




I hope so.



As another poster pointed out, we had more than enough government for more than a hundred years without an income tax at all. Starve the beast.

everything this person said is true.

 

[Austrian Econ Disciple]

Wrong.

Correct. Erwin went to court to show how the Income Tax is unconstitutional. He has a very strong case, except however, for the actual definitions of the terms. As written the Income tax does not apply to near every American. However, Peter Hendrickson the guy who went to court based on the definitions of the terms and who is correct, is also getting thrown in jail. In essence, the Government does whatever the hell it wants. By the way, he lost because his peers are fucking ignoramuses. So, we have two different tax resisters and they both are in jail.

When will we wake up and form our own modern day Sons of Liberty? I'm almost at that point.

 

[davesxj]

Won't happen.. ever./

But if it happened tomorrow we'll see inflation. They'll just turn up the invisible tax on us by borrowing the lost revenues into existance.

That's why ALL that other political mess would be necessary. Or we could just abolish the State.