Sunday, June 19, 2016

You are Worthless

Painting: Labor by Charles Sprague Pearce

While wandering the electronic halls of the internet I came across this fairly interesting argument, laid out in part here:

Example 1: Gains on Capital

            Joe places $100,000 in a certificate of deposit earning 6% per annum. Joe gave up his $100,000 for a year and at the end of the year he received $106,000 of which only $6,000 would be income as defined by the act. Joe still has his original $100,000 and can 'rent' it out again for another year, but he pays taxes only on the $6,000 gain.

Example 2: Gains on Sales

            Tom buys a widget for $1 and sells it for $2. Tom gave up $1 in order to receive $2, but only the additional $1 is considered income. Tom still has his dollar back and can purchase another widget to sell, but he pays taxes only on the $1 gain

Example 3: Gains on Labor

            Bob pays Bill $50 to unplug Mrs. Haversham's drain for which Bob charges Mrs. Haversham $75. Bob gave up $50 in order to receive $75, but only $25 is considered income, his realized gain of $25 on Bill's labor. Bob still has his original $50 that he can use to purchase more labor that he can sell for profit, but he pays taxes only on the $25 gain. 

But what about Bill's $50?  What has Bill given up? Nothing?  Bill gave up a day out of his life, he expended his effort and skill, employed the use of his working tools. Bill no longer has his day or his labor, both are spent. He cannot, even with every penny of his $50, buy another day or recover the effort he expended, yet according to the government, his $50, every bit of it, is profit, gain, accession to wealth and was received in exchange for nothing.

Joe recovered his $100,000, and paid no tax on it; Tom recovered his $1 and paid no tax on it; Bob recovered his $50 and paid no tax on it; but Bill can never recover his day, energy or labor, but pays tax on his gross revenue, including the value of his day, energy and labor and even if the value of that day, energy and labor exceeds the gross revenue!  

Read the entire article here: What is Income?

The government assigns a value of 0 to your time and labor by declaring that the entirety of your compensation is profit, in other words; You are Worthless! And you have got something (profit) in exchange for nothing (time/exertion/skill).

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