Does government spending cause inflation – or are underlying factors to blame?
One thing is sure, the Government's need for money results in increased or new taxes, and new taxes tend to cause inflation. And, government growth increases it's need for money.
Let's say, the Federal Government increases taxes on the Trucking industry. Would the increased cost in transportation cause a price rise of the goods transported?
"No taxation without representation" is a political slogan that originated in the American Revolution, and which expressed one of the primary grievances of the American colonists against Great Britain.
Taxation in the United States in 1776 was incredibly different than what it is today. There were no income taxes, no corporate taxes, and no payroll taxes. Instead, the American Colonies (and to a larger extent, the British Crown) were primarily funded by tariffs and excise taxes. This means taxes primarily existed on imports of goods and services to the colonies, as well as on the sale of particular products.
The American Revolution was precipitated, in part, by a series of laws passed between 1763 and 1775 that regulating trade and taxes.
The Stamp Act of 1765 was the first internal tax levied directly on American colonists by the British Parliament. The act, which imposed a tax on all paper documents in the colonies, came at a time when the British Empire was deep in debt from the Seven Years’ War (1756-63).
On August 5, 1861, President Lincoln imposes the first federal income tax by signing the Revenue Act. Strapped for cash with which to pursue the Civil War, Lincoln and Congress agreed to impose a 3 percent tax on annual incomes over $800. This went on until 1871.
The States ratified the 16th Amendment, instituting the federal income tax on February 3rd 1913.
The Federal Reserve System was created on December 23, 1913
So just how bad has the situation become?
Personal/Consumer Taxes & Fees (partial list)
- Federal income tax.
- State income tax.
- Local income tax.
- Employee social security tax (your employer pays the other half).
- Employee Medicare tax (your employer pays the other half).
- Property taxes.
- Road toll charges.
- State sales tax.
- Driver's license renewal fee.
- TV Cable/Satellite fees & taxes.
- Federal telephone surtax, excise tax, and universal surcharge.
- State telephone excise tax and surcharge.
- Telephone minimum usage and recurring/nonrecurring charges tax.
- Gas/electric bill fees & taxes.
- Water/sewer fees & taxes.
- Cigarette tax.
- Alcohol tax.
- Federal gasoline tax.
- State gasoline tax.
- Local gasoline tax.
- Federal inheritance tax.
- State inheritance tax.
- Gift tax.
- Bridge toll charges.
- Marriage license.
- Hunting license.
- Fishing license.
- Bike license fee.
- Dog permit/license.
- State park permit.
- Watercraft registration & licensing fees.
- Sports stadium tax.
- Bike/nature trail permit.
- Court case filing fee.
- Retirement account early withdrawal penalty.
- Individual health insurance mandate tax.
- Hotel stay tax.
- Plastic surgery surcharge.
- Soda/fatty-food tax.
- Air transportation tax.
- Electronic transmission of tax return fees.
- Passport application/renewal fee.
- Luxury & gas-guzzler car taxes.
- New car surcharge.
- License plate and car ownership transfer taxes.
- Yacht and luxury boat taxes.
- Jewelry taxes & surcharges.
- State/local school tax.
- Recreational vehicle tax.
- Special assessments for road repairs or construction.
- Gun ownership permit.
- Kiddie tax (IRS form 8615).
- Fuel gross receipts tax.
- Waste Management tax.
- Oil and gas assessment tax.
- Use taxes (on out-of-state purchase).
- IRA rollover tax/withdrawal penalties.
- Tax on non-qualified health saving account distributions.
- Individual and small business surtax (page 336 of Obamacare).
- Estimated income tax underpayment penalty.
- Alternative Minimum Tax on income.
- Federal corporate income tax.
- State corporate income tax.
- Tax registration fee for new businesses.
- Employer social security tax.
- Employer Medicare tax.
- Federal unemployment tax.
- State unemployment tax.
- Business registration renewal tax.
- Worker's compensation tax.
- Tax on imported/exported goods.
- Oil storage/inspection fees.
- Employer health insurance mandate tax.
- Excise Tax on Charitable Hospitals (page 2001/Sec. 9007 of Obamacare).
- Tax on Innovator Drug Companies (Page 2010/Sec. 9008 of Obamacare).
- Tax on Medical Device Manufacturers (Page 2020/Sec. 9009 of Obamacare).
- Tax on Health Insurers (Page 2026/Sec. 9010 of Obamacare).
- Excise Tax on Comprehensive Health Insurance Plans, i.e. "Cadillac" plans.
- Tax on indoor tanning services.
- Utility users tax.
- Internet transaction fee (passed in California; being considered in other states and at federal level).
- Professional license fee (accountants, lawyers, barbers, dentists, plumbers, etc.).
- Franchise business tax.
- Tourism and concession license fee.
- Wiring inspection fees.
- Household employment tax.
- Biodiesel fuel tax.
- FDIC tax (insurance premium on bank deposits).
- Electronic waste recycling fee.
- Hazardous material disposal fee.
- Food & beverage license fee.
- Estimated income tax underpayment penalty.
- Building/construction permit.
- Zoning permit.
- Fire inspection fee.
- Well permit tax.
- Sales and Use tax seller's permit.
- Commercial driver's license fee.
- Bank ATM transaction tax.
- Occupation taxes and fees (annual charges required for a host of professions).
Congress was assigned one very important job: The Purse.
The Federal Government no longer operates on a Budget, but borrows as needed.
How long can this go on?
