The contemporary US Taxation System is so unlike the one described by Alexander Hamilton in three of his Federalist Papers. Split between Federal, State and Municipal governments, the contemporary US Taxation System under the Jeffersonians was developed over the centuries through wartime measures, the most significant of which being Income Taxation. Income Tax, both Individual and Corporate, remains the primary method of the Democratic-Republican Party to acquire Kapital for their Federal budget whilst in control of the Federal government. The rest of the Kapital comes from Social Insurance Taxes (“Payroll Taxes”) via Medicare and Social Security, Federal Reserve Deposit Earnings (Kapital stockpiled at the Federal Reserve banks), Customs Duties (from Free Trade Agreements), Excise Taxes, Unemployment Insurance, Estate and Gift Taxes, and any taxes on pensioners. Note that other avenues of Kapital Accumulation, such as issuances of US Treasurys or fiscal spending, come with Schuld attached.
With so much Kapital coming from taxation policies, it should not be surprising that the Democratic-Republican Party’s economic policies since the Reagan Revolution revolves around the Taxation Rates. Whenever there is a discussion inside the Congress of Parliaments about adjusting the Taxation Rates, it is a balance over Kapital and Schuld. This methodology can also be observed at the State and Municipal governments as well, albeit on a smaller scale.
Forget about the quantification of Taxation Rate. The question must always be which part of the American Totality should have “more Kapital, less Schuld” and which shall have “less Kapital, more Schuld?”
“Higher Taxation Rates” are tantamount to more Kapital, less Schuld for the Federal, State or Municipal government. When taxes are raised, it is done with the expectation at the Market Economy and the Fractional-Reserve Banking System will have to have less Kapital and more Schuld in the process.
“Lower Taxation Rates” by contrast entail less Kapital, more Schuld for the Federal, State or Municipal government. When taxes are lowered, it is likewise done with the expectation that the Market Economy and the Fractional-Reserve Banking System will have more Kapital and less Schuld.
The Kapital gained from taxation policies can be made available to the Democratic-Republican Party’s own budgets at the Federal, State and Municipal levels. But because the Jeffersonians have no qualms about balanced budgets, they have had to use that Kapital for much of their own governmental expenditures. In both historical and actual practice, that has meant adding more and more Schuld to the US National Debt.
Within the Democratic-Republican Party, no matter who is in office or which Faction the President of the United States is aligned with, a point of contention persists between the Madisonian Faction (“Democrats”) and Monroean Faction (“Republicans”) over how much Kapital and Schuld should be accumulated. The Monroeans are adamant that a high Quantity of Schuld is well worth the trouble if it means there will be an even higher Quantity of Kapital. The Madisonians, meanwhile, adhere to a similar decision-making process, except the priorities are reversed.
What separates the two Factions is whether the Federal government should have more Schuld or more Kapital. It is always an either/or argument because, even though they both adhere to the “greatest Quantity of Kapital for the least Quantity of Schuld,” somebody else will end up having less Kapital after paying all their taxes. That ‘somebody else’ is the average American taxpayer.
This explains why, following the passing of the “Inflation Reduction Act,” the Monroeans are making a huge issue over increased funding of the IRS (Internal Revenue Service). The IRS continues to be the foremost organization in the collection of Federal taxes throughout the US. Around $80,000,000,000 USD got to be allocated to the IRS on grounds that it has spent the past decade in an underfunded state. Over the next ten years, this Kapital in question will be going toward its IT departments, technical upgrades, and a slow rebuilding of its ranks. A new generation seems poised to take the place of the older ones. All this is going to do is the IRS more efficient, something that the Monroeans are not inclined to appreciate if it means the Madisonians will get to further their economic policies, however flawed and subpar they truly are.
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