Saturday, October 15, 2011

Perpetual motion and "taxation"

Recently I again ran into the erroneous belief that government employees pay "taxes". This is a myth that just keeps on walking around, undead and looking for brains to munch.

The fact of the matter: Government employees pay no taxes. Ever. Zero. Period.

The pretense that they do is the financial equivalent of a perpetual motion device that keeps the economically ignorant among us (more) content with the status quo.

All government employee pay comes from government-confiscated "taxes", and all the "taxes" they pay go "back" to government. (The money never actually left the government's bloody hands in the first place.) Plus some money is always lost in the shuffle between parties. The lost money is equivalent to the waste heat in a mechanical system.

Put another way: If I paid you $100 dollars, but then demanded you pay a "tax" of 20% back to me, did I just give you $100 or did I give you only $80? Contrast it with this scenario: If I paid you $100 but you immediately paid a third party $20, I have actually, in fact, paid you $100 even if you passed some of it along to someone else. There is a difference.


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