Mr. Foley, a partner in Schwabe, Williamson, Wyatt, Moore & Roberts, practices law in Portland, Oregon.
The current mania for tax limitation, tax reform or tax protest provokes the more intense inquiry into the rationale and justification for any system of taxation and the proper structure of a fair conceptual framework for exercise of this state power. This essay presents a brief analysis of the issue and poses a simple solution much more in harmony with the idea of individual freedom than any existing dogma.
The Basis and Uses of Taxation
The ideological roots of taxation rest in the good earth of sovereignty, that compelling state power over the rights of individuals. Traditionally, the three common attributes of sovereignty consisted of the power of police, of taxation, and of eminent domain. From tribute paid involuntarily to the most evil or cunning or powerful by members of the tribe, to the king in his counting-house, to the modern exchequer and internal revenue agents and audits, the theory of taxation has changed little: those in control of the apparatus of the state exact assets and value from serf or citizen in order to pay for governmental obligations and services.
It becomes possible to identify three uses of the sovereign power to tax: the raising of revenue, the looting of citizens, and the implementation of social policies. Reason would suggest that only the first rationale deserves support, although one could cogently urge that the appropriate analysis of that concept does indeed implement a social policy, the policy of non-intervention in voluntary human action.
Taxation of persons as a means of raising revenue probably pre-exists recorded history. Operating on the assumption that all mankind within a given perimeter benefit from the existence of the order of the state, princes and their modern counterparts have long demanded tribute under force of law. Simply stated, taxation supports the state by supplying necessary revenue.
Like collecting revenue, the employment of taxation as a means of systematic looting and banditry antedates the dawn of history. Derived from the sinister side of the human actor, taxation can be enlisted as a handy label to obscure outright thievery. By its very nature, taxation requires coercion, not voluntary action, on the part of the subject; therefore, the master can appeal to law or theology or some other stratagem to justify his confiscation of the wealth created by another. History is replete with examples of the powerful and banal invoking “law” to line their pocketbooks and purses.
The practice of taxing to encourage or induce “social” policy appears of more recent origin, yet it is quite as wicked as the habits of the pickpockets of yore. The tactics are similar: those in power determine a “good” or “just” end and rob the productive to pay for that goal. For example, the populists in power may perceive that the wealthy individuals in society do not deserve all of the assets which they have secured through honest trade; therefore, by the means of progressive tax laws, the more wealth created and employed, the higher the tax payments levied, so as to achieve a leveling process and a misplaced, false egalitarianism. The entire modern program of entitlements owes its genesis and continued vitality to this very simple tactic once made famous by Robin Hood; the only difference resides in the fact that the modern counterpart of the Sherwood Forest rascal enjoys immunity from prosecution since he defines the issues and makes the rules.
The First Question: Is Taxation Proper in Any Form?
The rapidity of modern life encourages thinkers to leap to incomplete conclusions without plodding through the necessary intermediate steps. The initial question under the topic considered is not, what is a fair system of taxation? Rather, the fundamental inquiry must be, is any tax structure philosophically permissible as harmonious with the freedom philosophy? Only if the seminal inquiry is answered in the affirmative may we proceed to another question. I have addressed this key question in general terms elsewhere; it would not do to repeat the analysis at length here. For me, a justification for the existence and life of the state arises from a Rule of Necessity premised upon the incontestable nature of man. The socialist and the anarchist fall into the same trap: they fail to observe that man is not capable of perfection; rather he is possessed of a wicked side and while able to ira-prove he is never endowed with the inherent ability to achieve perfection.
The Rule of Necessity augurs that a free and orderly society must possess a state force to prevent internal and external fraud and aggression and a mandatory court of last resort to settle otherwise insoluble disputes. Without these limited state powers enforced by the monopoly of coercion, mankind would always be at the mercy of the strongest and most vicious members of the world. Beyond these necessary restraints, the state should not interfere with the market for creative human endeavor.
The anarchist argues that the need for personal protection and dispute resolution can be met by private defense agencies and private judicial arbitration. But what if someone refuses to play by the rules? What if an aggressor, convinced of the propriety of his position, employs force and wipes out your defense agency? What if a disputant refuses to come to arbitration or to abide by the arbitrator’s decision? There must be some community-recognized and supported court of last resort to protect rights and enforce judgments, else the world will quickly trundle into civil chaos, mountain feuds and mob warfare, with no rules except “might makes right.”
Why Voluntary Taxation Is Not a Feasible Concept
The realm of tax policy has introduced a like idea which must be mentioned, analyzed, and discarded: the concept of voluntary taxation. Of course, “voluntary” taxation represents an impossibility, a contradiction in terms, because by accepted definition, taxation is never voluntary but always coercive (although members of society may acquiesce in the form of government and its application of coercive powers).
The doctrine of voluntary taxation proposes that public works projects be submitted to the vote of the electorate for approval; those casting a negative ballot may show that vote to the clerk and receive a certificate of exemption from taxation for the particular project should it pass.
Without discounting the procedural difficulties in administration of such an enterprise, voluntary taxation in this form suffers from a more serious defect: it tends to approve government intervention in economic enterprises in which it has no business. If it is wrong for the state to build and maintain port facilities, airports, municipal auditoriums, domed stadiums, hydroelectric projects and a host of other endeavors, then it remains wrong even if the dissenters are saved from taxation to support the businesses. Those ac tivities beyond keeping the peace and settling wrangling can be done much more efficiently privately and with a higher moral tone and the voter should not be forced to lend tacit approval to government meddling where it doesn’t belong.
Moreover, justice demands that all participants in society pay a fair share of the cost of maintaining order in that society. The exemption described heretofore disparages that principle by excluding the dissenter from the cost, albeit for a laudable purpose. If the function is properly one which the state should perform, all should pay equally; if the function resides beyond the limited powers of government, then none should be mulcted for that purpose and the matter—if worth doing at all—should be left to private entrepreneurs.
The Role of the Voluntarist
Properly viewed, then, government, the repository of organized coercion, possesses certain legitimate functions: keep the peace, prevent the application of force or fraud by one man against another, and provide a fair, common and equal system for settling disputes and administering justice.
These functions require funding: judges and policemen must be paid a fair salary in order to induce competent people to serve; records must be maintained for public observation; the machinery of government must be housed in appropriate quarters; the necessary and proper im plements for carrying on these obligations—firearms, paper, gavels—must be purchased.
Believers in freedom often suffer the accusation of negativism. True, the consistent voluntarist thinker seeks to reduce a government to its proper minimum. In searching for reductions, he must, of necessity, oppose spending of public monies for improper and wasteful functions and ask that well-meaning programs be achieved by cooperative action, not coercive sanction. Nevertheless, the adherent of limited government need not always fit the mold of unswaying opposition, for he recognizes that true state responsibilities require government activity and, within the ambit of the legitimate conduct of government, he seeks ways to perform the job well. After all, for more than 6,000 years of recorded history, no state has approached perfection in performing the proper, i.e., legitimate, but limited functions of government.
The tax system represents one place which demands constructive affirmative action from the free individual in our society. Creativity and ingenuity proceed from adherence to fundamental principles; the voluntarist should possess those eternal values which enable him to construct a mode of taxation according to the rigors of a free society. Thus, like Diogenes’ quest for an honest man, our search for a fair tax system (to support a legitimate, limited government only) goes forward.
Types of Taxation in the Present World
Modes of taxation proliferate, restrained only by the limits of human ingenuity or imagination. As we approach the waning years of the twentieth century, more than two centuries into our nation’s history, the United States bears witness to a plethora of taxing devices. State and nation tax net income in progressive fashion. States collect fees, licenses, franchises and permits. States levy sales and use taxes upon the purchases of some or all commodities. Congressmen clamor for a value-added tax so prevalent in Europe which imposes a national sales fee on each step of the production and distribution process in our complex world. Net estates of deceased citizens suffer the ignominy of another progressive assessment, usually by both the federal and (sometimes more than one) local government. Highway use taxes apply to gasoline consumption. Even gifts beyond a limited exemption are taxed on a progressive scale. Real property, assailed by a bewildering variety of measures, bears a disproportionate burden at the state and local level. Certain luxuries carry additional taxes. Customs duties on imports add to the cost. In some jurisdictions, personal property or goods held for sale are assessed once a year. A mere litany would unduly lengthen this treatise and boggle the mind to boot.
Disguised Forms of Taxes
Beyond these specific taxes lie the more invidious assessments imposed by the state—more invidious because they are not called by their proper names. Social Security offers a prime example. Truly a tax, this exaction bears the label of an “insurance” payment, a misleading term since the law provides neither fund nor true voluntary insurance. Estimated income taxes and withholding payments likewise constitute disguised methods of increasing taxes: a citizen’s income tax bill falls due 3½ months following the close of his tax year yet, by these devices, the federal and local authorities deprive the taxpayer of the income he could have earned on his funds between the time he acquited them and the tax due date.
Surely, inflation constitutes the most invidious and unfair tax of all. We properly call inflation a tax because it results strictly from governmental meddling with the market system. Ancient monarchs clipped coins and practiced other petty debasements. Our government for many decades has ruled by deficit spending and, when the powers that be wish to fund their little schemes, they debase the currency (no longer bound by the market laws associated with the gold standard) by churning out tons of paper dollars. The increase in the federal money supply causes the phenomenon we label “inflation”: the more dollars in circulation relative to the value of created goods and services, the less each individual dollar is worth and the more dollars it takes to purchase a given good or service.
Inflation operates as the cruelest tax of all because (1) it is not labeled as a tax, (2) it penalizes the thrifty, and (3) although occasioned by government policies, the politicians habitually blame other alleged causes and thus misdirect the anger and corrective powers of the citizens. One cannot imagine a more unjust situation than a hard-working laborer who, by thrift and foresight, saves up to $50,000 during his working life, by forgoing luxury expenditures and restricting his consumption, in order to provide for his family when he is too old or too ill to work, only to discover that his hard-earned fund will only buy $5,000 worth of goods. Yet that is precisely the result according to the decline in the dollar purchasing power since World War II. Outright thievery would seem less painful.
The Elusive “Fair Share”
Reflection suggests that a fair tax system might contain two basic ingredients: First, each citizen should pay his fair share of the costs of government; second, the government should only tax real value, not fiat money inflation.
What constitutes fairness in taxation? In the first place, the proceeds should only be used to pay legitimate costs incurred by a limited government. In the second place, since every citizen receives theoretical benefits from the functions of the state so every citizen should contribute on a relatively similar scale as his neighbor. A cardinal rule in taxation should require those persons who benefit from government activities to pay therefor.
Advocates of progressive taxation assert that “from each according to his ability to pay, to each according to his need.” In other words, those who produce more value should pay progressively greater taxes.
This postulate rests on both spoken and silent fallacies. The creator-of-value benefits no more from the proper functions of the state than does the derelict; to each man, safety of person and ability to settle disputes without civil chaos represent ultimate values. Since the producer secures no greater benefits, justice does not demand larger payments. The “ability to pay” justification dwells, in final analysis, upon the “principle” that “might makes right,” that it is just and proper to band together to take by force from one man that which he has produced and to give these ill-gotten gains to another individual without the voluntary action of the producer. Since the justification fails, the proposition should lose vitality.
Likewise, exactions levied against certain kinds of property or put-chases to the exclusion of others bear little fidelity to fairness. Thus a property tax levied against residential and commercial real property exclusive of that owned by the state and its minions, falls too heavily upon one group of people to the exclusion of others in society. Those who do not own property pay a lesser share of the tax (through rent) particularly in an interventionist society where rent, wage and price con-trois flourish. Luxury, sales, and use taxes fall more heavily upon users of the taxed goods (hence the term “regressive” usually applied pejoratively to these taxes).
Elements of Confusion
Since income, estate, gift, and inheritance taxes generally partake of the progressive feature, they suffer from the “ability to pay” malaise.
Moreover, these taxes also suffer from unequal application since semantic and definitional problems inhere in deciding what constitutes “income” (is a scholarship, fellowship or prize “income”?) or a “deduction” (should medical expense and other taxes be deducted?) or an “ex emption” (should a person be entitled to a tax break because he contributes to the support of another person?).
In addition to rampant fundamental unfairness, modern tax systems suffer from gross inefficiency and waste of precious scarce resources. The amount of human energy—which could be creatively employed—wasted on regulating and complying with unreasonable and unnecessary rules and orders astounds even the casual observer. The various governmental units employ countless persons to write, interpret and decipher the revenue regulations, regulations which are so vast that no living creature can understand them fully. Those same public agencies utilize even more coercers in the form of auditors and agents and the like, men and women bent on enforcement of needlessly complex laws.
The taxpayer, on the other hand, must spend large amounts of time and energy mastering the rules and regulations and complying with the regulatory process all at the expense of his creative endeavors; after all, human time and energy represents the most productive and precious of our scarce resources which should be husbanded for higher endeavors. Again, the beleaguered taxpayer must hire a veritable army of tax preparers, certified public accountants, tax specialists, attorneys, bookkeepers, clerks and the like, just to satisfy the maze of rules and orders which pockmark the fair face of justice. Truly the cost of the present system, in economic terms of waste and inefficiency and in natural law terms of morality, represents too high a price to pay.
Indexing to a Constant Dollar: False Security
Measurements of income, assets, and expenditures in fiat currency produce several unenviable distortions in tax laws, leading to the suggestion by prominent authorities that the tax base—whatever the revenue program adopted—ought to be measured in constant dollars of uninflated value. In a modified form, for example, the Canadian Conservative Party proposed such an inflation discount in the 1972 elections and came within an eyelash of overturning the Liberal Trudeau government on this issue alone. Of course, the plan was hackneyed beyond all recognition with the political shenanigans so common to politicians who neither know nor care about sound economic theory. Nevertheless, the harassed Canadian taxpayers responded so favorably to the inherent equity of the idea that the Liberal government adopted a modified version of the plan as an essential part of its program.
On the surface, such a plan appears to possess merit. As the eminent economist, Henry Hazlitt, has long advocated, capital gains should be taxed in real dollars, not inflated currency. For example, suppose I purchase 100 shares of ABC stock in 1940 at $10 a share, establishing $1,000 as my basis. I sell the stock in 1980 at a price of $100 a share (sales price $10,000). Under current legislation, I would be assessed a tax based on a long-term (more than one year holding period) capital gain of $9,000, although varying distortions in the law currently treat capital transactions somewhat favorably. Yet my gain is illusory because 1982 dollars are worth less than 10 cents in 1940 dollars.
Mr. Hazlitt suggests that the government should tax only the real (uninflated) gain on the constant dollar value and thus discount my $10,000 sales price to $1,000 (value stated in 1940 dollars). Thus, in the example chosen, I have realized no real gain, not a $9,000 inflation- wracked charade. Under this theory, if my sale discounted to constant dollars revealed a deficit position, I should be entitled to a tax loss for I have truly suffered a loss measured in real dollars, or dollars of constant value.
Other imbalances caused by inflation appear less readily but just as viciously. For example, the graduated income, gift, estate and inheritance tax schemes promote what is euphemistically termed “bracket creep,” creating an evil sibling to the distortion discussed by Mr. Hazlitt: As the nominal wages of a taxpayer increase, he moves to a higher bracket or tax rate on his base al though inflation has robbed him of any real gain and, in many cases, has placed him in a deficit position. The result: higher fiat income, higher tax rates, less real spending power, and a windfall to the taxing authorities.
Recent Proposals to Achieve Fairness in Taxing
As a result of these patent inequities, proposals have appeared in the past decade to apply a constant dollar approach to all tax forms. For instance, the Oregon-based Research Committee Against Inflation proposed a net receipts tax on an indexed basis in the early 1970s. In such a proposal, the tax rate should be levied upon receipts valued without the inflation factor so that the taxpayer pays his share of the cost of government based upon what he really earned and what his receipts or “income” (in the broad sense) really will buy in the marketplace. The proponents argued that it makes little sense, and certainly does not accord with common fairness, to tax a man on money substitutes in terms of money substitutes which have been debased by the taxing authorities.
Let us consider a common example. Our taxpayer earns $15,000 in 1980 from all sources. That $15,000 will buy equivalent goods and services in 1980 to those which could be purchased in 1940 for $1,500. Now, does it harmonize with justice to levy any kind of tax on the $15,000 income when it is really only worth $1,500 in 1940 market power terms, particularly where the loss of purchasing power is solely attributable to the policies of the same body which now levies the tax? To state the question answers the inquiry.
Application of this novel idea educes at least three complex issues. The first issue: What base year or years to use from which to measure inflation, since, according to Dr. Pick, “We started to project the financial syphilis all over the world in 1776 when Ben Franklin began the Continental dollar which became worthless after four years.” In the examples, 1940 has been used as the base year because, according to Dr. Pick, that represented the last inflation-free year in this country.
Undoubtedly, other economists using other measuring devices could disagree with Dr. Pick and suggest their own base years, inflation-flee years, and rates of inflation. One could make a strong case for using 1914 (before the twentieth century wars and after a long period of peace during which time a relatively free economy existed), 1933 (before the nation left the gold standard, which imposes certain natural law impediments restricting currency nonsense), 1957 (subsequent to the Korean war and during a time of relatively balanced budgets) or any one of a number of other key years.
A Shifting 10-Year Average as a Basis for Taxation
Probably the fairest approach requires the use of a 10-year average which shifts the burden forward each year. For example, the inflation discount could be determined by using the federal government’s own statistical studies for the years 1957-1966, averaging the inflation factor, and applying it to receipts during 1980. For 1981 receipts, the base-year average could be shifted forward to 1958-1967; for 1982, we could use 1959-1968; and so on.
The use of the shifting 10-year average strikes a relatively fair balance necessitated by the realities of the situation. No year forms a perfect measure, and no state-produced econometric tool offers an exact yardstick. Reaching too far back into antiquity may unfairly hamper the government because of intervening crises not truly the responsibility of the present men in power. Using a base period too close to the fact (Canada proposed 1970 as a base year for 1972) destroys the efficacy of the system which is designed to aid the taxpayer who has accumulated fiat currency.
A single year can disproportionately affect the currency because of world-wide fiscal, emotional, and natural disasters while a 10-year average should balance out the hills and valleys which beset any economic chart. The period 1957-1966 supplies a happy medium from which to start. Although budgets were never in balance at the outset, and the Vietnam war had not yet heated up, these inflationary factors proceeded apace as the period wore on; the real glut of currency production did not take place until the advent of the Nixon administration.
Measuring Capital Gains
The second issue concerns the interrelationship between assets purchased, held for a period of time, and sold, and other receipts. Capital assets, as explained, might be treated to a discount factor between the year of acquisition and the year of transfer. All other receipts could be dis counted from the year of acquisition and the base-year period. Although gifts and inheritance could be treated similarly to capital assets, ease of application might require that they be considered as general receipts in the year of acquisition.
The third issue: what should be the first step in implementation of the constant dollar approach? Assuming that most legislators will decide that an indexed tax plan, as outlined in this paper, would not reflect their vested interests, the citizens can still take steps to effect some of these proposals. The obvious: elect better representatives. The less obvious: in states, enjoying a system of direct legislation, enact a measure to tax only real income by means of the initiative process. Once such a measure is enacted by the people, the government will learn to live within its means. The state example or examples will demonstrate the soundness of fair and credible tax policies and, hopefully, will induce the federal government, through its elected representatives, to follow suit.
Despite the appeal and lucidity of a constant dollar approach, its defects impel that it be discarded in favor of a better plan. Human nature dictates that such a device tends to encrust inflation into the political system rather than defeat it, by ameliorating the patent evils of paper money. Like the insidious withholding tax, a constant dollar offset would render currency debasement relatively painless to all but the perceptive observer; thus, it would serve as an opiate to mask the real cancer of government run amok. In addition, there exists little chance that a fair constant dollar credit would be enacted and maintained by elected officials who benefit greatly from the social schemes induced and encouraged by inflated currency. Moreover, the system raises complexities which would defeat the desired end of eradicating obfuscation and creating a simple yet fair tax structure.
A Proposal: Proportional Gross Receipts Taxation
Review the elements necessary for a fair system of taxation: First, the law should raise the necessary revenue to fund only the legitimate purposes of government, the prevention of aggression and the settlement of insoluble disputes. It should not act as a tool for looting the citizenry nor should it constitute a device for implementing social policy such as the redistribution of income and the satiation of the ends of envy, greed, and covetousness under the facade of egalitarianism and entitlement. Second, it should operate to collect a fair and equal share of the legitimate costs of government from each benefiting citizen. Third, it should be simple to administer so as to save the time and energy now needlessly expended on compliance and enforcement.
Given the flawed nature of mankind, no perfect system emerges, yet one concept seems better qualified than all others to fulfill these appropriate ends: Each person should contribute a proportionate amount of his gross receipts each year from each and every source to defray the legitimate and limited functions of his government; the government should be circumscribed from acting beyond its limited authority and from spending or pledging funds in excess of its income. Mr. John Chamberlain has delineated the justification of a proportional theory of income taxation, a rationale which can be carried to its logical conclusion by applying the sound idea of proportional taxation to gross receipts:
Under the proportional theory of tax equity, a rich man would pay more taxes than a poor man, naturally. But every dollar of assessed property value, or of income, or of spending, would be taxed in equal amount, at fiat percentage rates. Dollars would be treated equally, no matter who owned them, or spent them. Thus the citizens would be accorded the “equal protection of the laws”—and their “privileges and immunities” would be equal, as provided for in the United States Constitution. Any other way of treating taxation was regarded as discriminatory, or as putting penalties on ability, ambition, and success.
Under the proportional gross receipts tax system, every person, corporation, foundation, or other entity (save for governmental units) would pay a fiat percentage (e.g., 1%) of its annual gross receipt of funds from every source. There should be no exceptions, limitations, exclusions, deductions, credits or exemptions, thereby greatly simplifying the whole tax preparation process. This plan system would produce sufficient revenue to support necessary governmental functions and would result in a great saving of creative energy now utilized in the regulatory and compliance process.
Comments on the Plan
Several aspects deserve comment, for the proposal does not lack flaws. First, why should, all institutions be subject to tax? The answer: The tax will not be onerous because the rate will not be graduated; the burden of government should fall equally upon individuals qua individuals and upon individuals operating in concert as entities or aggregates because the latter enjoy the protections of a properly-restricted government. There exists no good reason to exclude hospitals, foundations, churches and the like from the payment of the cost necessary to solve disputes and to maintain order and safety; indeed, cogent arguments can be made that taxation will impel those institutions to operate on a more businesslike and sound basis.
Second, will the plan unduly restrict the state? I think not. While the actual income to the government from a 1% gross receipts tax is not clear, preliminary studies demonstrate that such a rate should be ample to carry out the proper functions of government. No moral reason exists to permit the state to live beyond its means and to mortgage the future of its citizens, nor to allow it to carry out functions which ought better be left to the private endeavors of the citizenry if indeed they are worth doing at all.
Third, what constitutes gross receipts, and why not apply the tax to net receipts only? Gross receipts envisions all income of every kind and nature accumulated during the tax year: Wages and salaries, inheritances, gifts, prizes, scholarships, transfer payments, to name a few items. Simplicity demands no exclusions; exemptions breed special interest legislation and inherent un fairness.
Fourth, is it fair to tax proportionately so that a man earning $1,000,000 pays 1% or $10,000 in tax while a welfare recipient receiving $1,000 pays only $10 to the state? Probably not, but the concept is ever so much better than what now exists that some slight deviation from philosophical precision might be acceptable. A case can be made that each person and entity in a territory gains an equal value from the protection of his person and the establishment of order so that each ought to pay a fiat rate, e.g., $100 a year, for government services.
The proportional gross receipts tax incorporates a progressive feature in that each person pays a fiat percentage of his receipts, and the receipts by definition may vary. The Libertarian Party fell into an identical trap during the 1980 presidential campaign when it decried unfair taxation yet produced a plan which still incorporated some progressive features. In the end result, the proportional gross receipts tax is acceptable because the person or entity with greater receipts may have more at stake in material things and thus may require justice services more often or in greater intensity than one possessing lesser wealth.
No system designed by fallible individuals will produce perfection in this orderly world. However, much remains to be done in the restriction of the state to its proper functions and in the restraint upon untrammeled taxing and inflating powers. Adoption of the proportional gross receipts tax will mark a long step toward sanity and morality in the concept of sovereignty. 
3. See, e.g., Foley, Ridgway K., Jr., “Individual Liberty and the Rule of Law”, Freeman 357378 (June 1971) and 7 Willamette Law Journal 396-418 (December 1971), and “The Source of Sovereignty”, op.cit, note. 1.
5. Admittedly this conclusory statement does little justice to the subject of the root causes of inflation but it will suffice for the purposes of this article. The following works, among others, discuss the problems in great detail: Mises, Ludwig Von, Human Action (3rd revised edition, Henry Regnery Company, Chicago 1966) p. 780 et seq.; Rothbard, Murray N., What Has Government Done to Our Money?, 27 et seq.; Hoppe, Donald T., How to Invest in Gold Stocks and Avoid the Pitfalls (Arlington House, New Rochelle, New York, 1972) Part I.
6. "Franz Pick’s ‘Crises Seminar’: Gold and Silver and the Coming ‘Upheaval’,” The Investing Professional (June 1973) 56. Dr. Pick states that the last relatively inflation-free year was 1940 and the 1940 dollar is worth less than 10 cents today.
11. If anyone doubts that only the United States government can flood the marketplace with fiat currency, let him print his own dollars and try to use them. Rather severe penalties attach to such conduct.
14. Government records are not available to make the exact determinations necessary for a precise answer. State records have been studied in the years 1973-1976 which demonstrate that 1% may yield much more return than necessary to fund state functions in Oregon.
Taxmanship, a term sometimes applied to avoidance in its more intricate forms, might be called the active response to today’s crushing tax burdens. It involves waste and irrationalities that may be as great a drag on growth as is the passive response of avoiding taxes by choosing not to earn to full capacity. The toll in manpower alone is impressive . . . . Since government must have revenues, and compliance with tax laws of any kind will involve bookkeeping and other administration, some drain of human resources in the process is inevitable. But the degree to which present taxation forces the defensive deployment of time and talent represents a deplorable waste.
The Morgan Guaranty Survey,