The U.S. Tax Code Is a Disaster… and It’s About to Get Worse

Andy Snyder|April 9, 2021

Have you bought cocaine lately?

Have you grabbed a bit of heroin and went off for a good time?

Or maybe you swapped twenty bucks for some cheap marijuana from a fella in a dark parking lot?

If so, you’re not only a drug criminal… but also a darn tax cheat.

Obviously, we jest with our line of questioning. Please don’t do drugs. We bring up the topic only to make a very obvious point.

America’s tax code is a disaster.

And, as you’ve probably heard, it’s about to get worse.

Tax Stamps

Actual drug tax stamp from Nebraska

We bring up the idea of taxing illegal drugs just to show how greedy and backward things are. Most folks have no idea these sorts of crazy ideas exist.

But – right now – a full 17 states tax illegal drugs. Everything from cocaine to moonshine sales is required to be taxed.

Of course, it’s all anonymous.

Simply log on to the state’s department of revenue website and purchase an illegal drug tax stamp. Attach it to your bag of goodies… and you’re good to go.

At least the taxman won’t cuff you up when you get busted.

It’s nuts.

The logic behind the idea shows the government cares not about its citizens… but cares oh so deeply about their money.

E-ZTax

With national debt soaring at a pace we’ve never seen before and the ratio of debt compared with our GDP at a level that’s never been higher, rising taxes are a certainty.

History shows periods of “wartime” spending like we’re currently enduring are followed by long, often painful periods of rising taxes and major changes in fiscal and monetary policy.

The current president seems to agree.

But it’s NOT a hike to the tax on capital gains or tweaks to income brackets you need to worry about. And don’t fall for the headline notion that only the wealthy will feel the effects of Washington putting even more tar on its sticky fingers.

If you invest… if you live on a fixed income… and even if you’re squarely in the “middle class” that both parties in Washington have vowed to protect… your cost of living is about to rise substantially.

If you’re unprepared, it will take your quality of life with it.

We call what’s happening the “E-ZTax syndrome.”

You see, here on the East Coast, we pay our highway tolls with an electronic system called E-ZPass. No matter where you live, you likely have something similar.

In Pennsylvania, the oh-so-wise folks behind such things have used the COVID mess to totally eradicate cash from our toll roads. Now the money is ripped from our bank accounts as we blissfully head to grandma’s house.

Most drivers like the convenience. They have no idea the real reason for the all-electronic push.

Without the physical exchange of cash, it’s much easier to raise tolls. And, boy, are they going up.

In fact, history shows that toll roads that go to an electronic system see their prices rise by 30% over the next decade when compared with traditional cash-based systems.

Study after study has proven why it happens.

It’s simple. Toll rates go up because they can.

With an all-cash system, it takes great effort to change prices – especially away from big round numbers. Moving a toll from $1 to $1.10 means more change, more machinery, etc.

Most importantly… drivers will certainly notice the change when they’re forced to look under the seat for an extra dime.

That’s not the case for an electronic toll. Just tell the computer to take out an extra 10% and the driver will hardly know.

And prices go up… and up… and up.

Around here, they’re slapping tolls on everything.

A Big Mistake

But toll roads aren’t the only purveyor of hidden tax hikes.

Milton Friedman – one of the great voices on the role of a small government – died with a bit of a monkey on his back.

He’s the man who helped Washington create an automatic withholding system for our federal taxes.

In a cash crunch after World War II, our keepers made it more “convenient” to pay our taxes by simply pulling the money out of our paychecks each week. It means the state gets its money and most folks never have to see the raw number of just how much – or how much more – they’re paying.

It’s especially true these days, when most folks are paid electronically… and never even see a pay stub.

(In fact, many Americans now celebrate in April when they find out Uncle Sam took too much and will now give us our money back… but only if we sit down and calculate just how much extra he took.)

Friedman grew to regret his work…

“It never occurred to me at the time,” he wrote in his autobiography, “that I was helping to develop machinery that would make possible a government that I would come to criticize severely as too large, too intrusive, too destructive of freedom.”

Just like cruising blissfully through the tollbooth… most folks have no idea what they’re paying or how much it’s gone up.

And it’s about to get a whole lot worse.

Plugging the Leak

Again, there’s a great push to raise taxes. It must happen. We’ve spent trillions more than we have.

But tweaking how much you pay when you profit from stocks or sell grandma’s house… won’t save a ship with this many holes.

Nope.

We’ll be patching those leaks with every rag, stick and piece of chewing gum the lawmakers can get their hands on.

Look at your cellphone bill, for instance.

The Tax Foundation found that soaring fees and taxes have risen so much over the last decade that they now account for 18.6% of the total bill.

There’s a fee for 911.

There’s the “Universal Service Fund” – which provides service to rural and low-income communities.

There are tax surcharges – fees collected by carriers to pay their taxes.

There are state taxes… local taxes… and “regulatory” charges (which, once again, help carriers cover their costs of doing business in a world of Big Government).

Most folks pay it and never know what they’re paying for. It’s all electronic, and the charge comes right out of their bank accounts.

More to Come

We could list a slew of similar deals – everything from the tax we pay on gasoline… airline tickets… vehicle registration fees… and, of course, speeding tickets… to even highly illegal drugs.

When a nation is okay with taxing something that it has spent decades locking folks up for – even killing them – it shines a light down a deep moral and ethical canyon.

The fact that any lawmaker can vote for an “anonymous” tax stamp on illicit drugs at the same time as they lock somebody up for 50 years for selling that drug… is, well, downright nauseating.

It proves that it’s money over morality.

And it’s going to get worse.

P.S. This is exactly why we are warning folks to watch the news on June 16. That’s the day a group of unelected officials will gather in Washington to discuss the fate of America’s money. If it goes the way we think… cash could soon be banned in America. More details here.