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Oil, Taxes, and Gold
The Wall of News, June 11, 2008
Is the price of oil too high for you? It is for most Americans. But, is it really higher oil prices or the loss of value with the dollar? Some is, of course, higher demand world-wide. The major cause is the loss of value to the dollar.
Most of us use the dollar as a platform for cost. “Gee, prices have gone up!” Could it be the dollar lost value, instead? More often than not it is the dollar losing value.
We as Americans should be very conscientious to the price of gold. For the most part, the value of gold does not change, the dollar does.
Gold used to cost $500 a troy ounce (14 troy ounces to the pound.) Recently the price was $1,000. Did the price of gold rise, or did the dollar lose value? The dollar lost value.
In colonial times gold was at $10 an ounce. That means when gold is at $1,000 an ounce our current dollar is worth a penny in Colonial Dollars.
Granted all things are not equal and there are other forces that influence cost; but, for the purposes of this discussion and because this is the major influence, we will equate all effects to gold and ignore the other factors.
Who is responsible for the value of money? The Federal Government. The first step to destroy the value of money was by President (FDR) Roosevelt. He ordered gold coins and bullion back to the government and no citizen was allowed to own gold, other than jewelry and similar objects. In 1963 Richard Nixon removed the last ties to gold or silver for the dollar and did a major devaluation of our currency. The dollar has been on a roller coaster ride every since.
The claim often used is that devaluing the dollar makes good business sense. Our products are cheaper for the world. This is true for the short run, but inflation enters into the equation and all advantage is gone.
A more prudent philosophy would be retie the dollar to gold and strengthen it to be again worth $10 to the ounce. Our prices to the world would, at first rise, than adjust do to competition.
The one pound bag of beans costing $1.19 a pound would drop back to one cent per pound as it was during colonial time. Money is no more than a credit system that replaces bartering. One horse equals one horse. A good horse in colonial times cost $10 dollars. Today that same horse would cost $1,000. Or put it another way, one horse does not equal one horse, maybe one half a horse.
As the value of our currency increases, and yes let’s do so in stages, prices will adjust. It is the value to gold that is the stabilizer to the system.
It should be as in the past, walk into any bank and swap $10 paper money for one ounce of gold. But, who wants to carry gold, it is heavy. Money used to be certificates that the bearer of the paper was entitled to that money in gold or silver.
Let us bring it back to today. If the value of a dollar rose again to its recent past, gasoline would cost a dollar. Maybe there are some folks who do not want to see this happen. Maybe?
An additional way to increase the value of a dollar is to bring government back to responsible spending. We have all heard about the Fair Tax. Sounds nice. Yet, if you thought the black market was bad during prohibition, wait until the Fair Tax becomes law. Who knows, it could make the Tommy gun popular again with gangsters. Why, to save the cost of taxes on products.
Responsible taxation, fair to everyone is the goal. So let’s repeal the 16th Amendment and forbid the Federal government to take in any manner value of any kind from United States Citizens or Corporations. We bring it back to the States. Anything the Federal Government needs to do dealing with money is always done at the state level, never Federal. It is time to take back this monopoly on money from the Federal Government. The making, Valuing, and Taxing, that is a monopoly.
We could mandate that the Federal Government must return to the historical levels of 3% on Gross National Product (GNP). By doing so, all taxes could be capped at 10%, including state and local and school. If any of these entities need more money, let them pass the hat. The states could enact more taxes if they so desired but the Federal government would have to come to the states and “assess” them or, more accurately, “ask” for the money. In this way, the people would actually have a voice in how their money was spent.
A simple tax system would be that each state would receive a tax bill from the Federal Government based upon population. It is the responsibility of each State to raise the money for this tax bill. And, they could do it in whatever method they prefer.
Corporations would not be taxed, making them competitive in the world market. The corporations would have to provide dividends of all the profits to the shareholders. The exception would be for special projects such as new equipment or expansion. These funds would go into a special account (read: “Trust fund”) and can only be used for such activities within a given time frame. If not, it must be turned over to shareholders, or pay a hefty tax of say, 50%?
All taxes would be paid by the people. No taxes for anyone making under $250 thousand. Locals could not tax, their portion would come by apportionment from the State. And no the State cannot hang onto the money that belongs to the locals. The same will be true for schools. Again, if anyone needs more money - pass the hat.
The economy would expand exponentially. The increase in economy would adjust for the shifting in taxes. It would remove sales tax and property tax as will as all the other hidden taxes. You would be tax-free if you make under $250,000. And let’s not forget to index the compensation of federally elected officials. So, if even the value of a parking space increases for an elected official, that becomes part of the indexing process for all Americans with this tax.
In the end, oil prices will even out to an affordable price at the pump. And if there is a mandate, such as alternative energy, let’s take an additional 1% to underwrite these mandates by citizens vote. If there are no mandates, the 1% would go into a trust fund that would grow and start offsetting taxes with the dividends.
There are many other “solutions” to this “real taxation” policy. The ones mentioned here are only meant to begin the discussion and hopefully the process by which our country can get back to where it should have stayed all along. We at the Society would be very pleased to work with any group that feels this is the right avenue to take in beginning the reform process which would, by its very nature, change everything about the way our country works.
Let us know your opinion. Put us in touch with the group or groups you know that want to make the United States of America great again by getting back to the basics of our Constitution which limit what the Federal government can do without state’s approvals. The loudest voice gets the most attention. That’s what stopped the Vietnam war and it can work again in this crippling scenario of the American way of life.
Copyright 2008 Wall of News