Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes.
– Benjamin Franklin, letter to Jean-Baptiste Leroy, November 13, 1789.
As this quote from the great Founder shows, taxes have preoccupied Americans since the beginning. (Also notable is Franklin’s realism about the fragility of our Constitution … but I’ll save that juicy morsel for another day.)
Today, all the political talk is still about taxes … specifically, the Trump/Ryan plan to slash taxes on the wealthy and on corporations.
I’ve spoken about this plan before. Today, I want to turn the entire issue on its head.
I submit that our national obsession with taxation is misplaced … in fact, it conceals a far more pernicious threat to our collective and individual prosperity … one that’s staring us right in the face.
Why Do We Care About Taxes?
A silly question, you might say. But it’s one we must ask to get to the underlying truth.
We care about taxes because they reduce our disposable income. If by some miracle it were possible to pay taxes without having to reduce our expenditures, few of us would care about them.
But care we most certainly do. After all, most middle-class households pay somewhere between 15-25% of their gross income in income and payroll taxes. That’s a lot of potential household consumption and/or investment going to the taxman.
But what if I told you that taxes pale in comparison to another drain on many American wallets … and that things are going to get much, much worse soon?
The Real Vampire Squid: Debt Service
At the height of the post-2008 financial crisis, Rolling Stone political writer Matt Taibi produced a memorable quote about Wall Street behemoth, Goldman Sachs:
The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
