Get ready to hear more about taxes, taxes, and more taxes.

This article was originally published by Jane L. Johnson at the Mises Institute.

No American politician in office wants to talk about taxes, unless of course it is to promise a tax cut. No Misesian views taxes with anything other than suspicion, and Mises himself had principled views on the subject:

Taxes are necessary. But the universally accepted discriminatory tax system under the misleading name of progressive income and inheritance tax is not a method of taxation. It is rather a method of disguised expropriation of successful capitalists and entrepreneurs.

It is important to remember that state intervention always results in violent action or the threat of such action. The money that a state spends, for whatever purpose, is raised through taxation. And taxes are paid because taxpayers are afraid to resist the tax collectors. They know that disobedience or resistance is futile. As long as this is the case, the government is able to collect the money it wants to spend.

And America’s favorite and famous statesman, Benjamin Franklin, so aptly said in 1787: “…in this world nothing is certain except death and taxes.”

The diversity of taxes in the United States

Americans currently pay a wide variety of federal taxes on earned income, investment income, estates, gifts, alcohol, tobacco, and customs duties on many imports. Americans also pay state and local taxes on real estate, personal property, retail sales, alcohol, and tobacco.

Regardless of who is elected president in January 2025, Americans should brace for a lot of pressure—and perhaps some relief—on taxes in the coming year. At the top of the list will be former President Trump’s 2017 Tax Cuts and Jobs Act (TCJA), whose provisions expire in December 2025. Congress is facing calls to extend many of the law’s provisions as the country grapples with persistently large federal budget deficits. It’s not yet clear how the new 119th Congress will handle the expiration of the TCJA, or what the U.S. tax code will look like after 2025.

Proposals for other types of taxes or credits

As if existing taxes were not enough, there is no shortage of other proposals, some of which could be considered mildly serious, others of which are pure fantasies that will never enter the American tax lexicon. Here are a few, in no particular order of sensibility or fanciness:

• Former President Trump, if re-elected this year, has proposed significant changes higher import dutiesincluding a general 10 percent tariff on all imports into the United States. He hinted at tariffs high enough to replace revenues generated by the federal income tax, citing William McKinley for his use of tariffs at a time when the income tax was unconstitutional. Whether the McKinley era (1897-1901) is comparable to today’s environment, where government is much more important, is another matter.
• The former president also proposed elimination of tip tax He claims that employee incomes will increase by 1.5 percent, based on a conversation he had with a Las Vegas restaurant waitress during his current campaign. While this idea may be a catchy populist campaign strategy, it’s unclear what the impact on federal tax revenues might be, or how many industries other than restaurants might shift their employees’ compensation from wages to tips if tips aren’t taxed. Perhaps doctors and lawyers will start receiving a portion of their income in voluntary tips. Despite these doubts, bills to exempt tips from taxation have recently been introduced in the U.S. House and Senate.
• And his vice presidential running mate Vance is suggesting higher taxes for taxpayers without children, which is already the case with the Child Tax Credit for people with qualifying children. This credit has been available since 1997, and fifteen states also offer variations of it. Eligibility for these credits has changed over the years, and these credits will almost certainly be up for discussion again this year.
• THE Fair tax The bill was first introduced in Congress in 1999, and most recently revived in January 2023 as HR 25, and remains under consideration in the House Ways and Means Committee. The legislation would replace the federal personal income tax, corporate income tax, payroll tax, and estate and gift tax with a national retail sales tax levied at the final point of sale on all goods and services, including those provided by the government itself. The legislation would also abolish the IRS as all taxes would be collected by state governments and passed on to the federal government. The initial sales tax rate would be 30%, taxing $30 on a $100 purchase for a final purchase taxes included price of $130. As proposed in the bill, however, the net tax rate is only 23%, calculated as $30 divided by $130. Traditional state sales taxes apply to the sale price of a good or service on a excluding taxes base, making tax rate comparisons misleading.
• THE Flat rate tax The flat tax system was first proposed in 1981 by two economists writing in the editorial page of the Wall Street Journal. The initial plan gave each family a broad exemption, taxed all wage income above that level at a single, low rate, and exempted investment income from all taxes at the household level. Proponents of the plan argue that the plan would increase savings and economic growth by increasing the after-tax return on savings, though skeptics doubt this. The concept has inspired some U.S. states and foreign governments to adopt flat tax systems, although it has never been brought before the U.S. Congress for discussion or vote.
• Wealth taxes Wealth taxes are supposed to attract the wealthiest Americans, but there are questions about how such taxes would be administered, whether they would generate significant tax revenue, and whether they would encourage wealthy people to leave the United States. Some countries that have implemented wealth taxes have subsequently eliminated them for these reasons.

Future prospects for taxation and spending

Despite the consensus that the United States has a spending problem, not a tax problem, the federal government will continue to seek revenue despite persistent federal budget deficits and rising debt. Interest on the federal debt amounts to about $1 trillion each year, representing 39% of personal income taxes paid.

More tax proposals are on the horizon. Climate change advocates are pushing for carbon taxes. Others on the left of the political spectrum are pushing for more progressive taxes to fund their favorite income and wealth redistribution programs. Expensive new programs like universal basic income (UBI) and reparations, two new forms of entitlement, would dramatically increase the need for additional tax revenue and/or require significantly larger amounts of federal debt. So too are calls from the populist right for more social benefits for the middle class, such as expanding child tax credits and earned income tax credits.

Although the two major political parties are offering very different policy prescriptions for the upcoming presidential election, both appear to lead to increased Treasury debt issuance and federal budget deficits, which could exacerbate inflation and threaten bond markets.

Thus, voters can be predicted to continue to be unable to cope with the large, persistent federal budget deficits and the accumulation of debt that now amounts to about 100 percent of GDP; to cope with the insolvency of the Social Security, Medicare, and highway funds; and to cope with the lack of consensus on measures to reduce spending and increase tax revenues.

The question then is to what extent Americans will tolerate the additional tax burdens and debt that will weigh on current and future generations before responding with a change in political and economic trajectory. Such an inflection point, however, is not yet on the horizon.

EDITOR’S NOTE: Taxation is theft, and government is slavery. Isn’t it interesting how a bunch of rich sociopaths spend so much time finding ways to steal from those who have rightfully earned their income? Americans have become very tolerant of their slavery and too few people understand what is going on yet. Fortunately, it is only a matter of time. Taxation is only necessary if you believe someone has the right to take from you and you believe someone else has the right to rule or own you. If you own yourself, you own the fruits of your labor. Anything less than that is abject slavery. It is time to wake up and break free. Watch the video below: