According to the 2001 World Almanac, the federal government claimed just over $1 trillion in revenues from income taxes in 2000—up from $895 billion in 1999.
In the world of the working class, we put our few hundred dollars into a checking account to cover the checks we write to pay our monthly bills; savings are minimal, if any at all.
In the world of high finance and multi-billion dollar budgets, things are more complex. This is a world of politicians, lawyers, accountants, businessmen and bankers; a world of credit, fractional reserve banking, interest, stocks, bonds, trusts, annuities, futures, letters of credit and other financial instruments.
We are taught to believe our taxed labors are applied directly to building and maintaining roads, bridges, schools, parks and national forests for the public good. However, research shows that the $1 trillion collected is not deposited into any bank account to pay the nation’s bills.
So, the next logical questions are, “Where are all these tax dollars going?” and “How is the federal government funded?“
Most people believe their tax dollars are applied directly to the expenses of government. An extension of this same belief promotes people’s desire to pay their fair share of the tax burden so we can all enjoy the benefits of living in America.
The Grace Commission
Industrialist Peter Grace and syndicated columnist Jack Anderson formed the Grace Commission in 1982 in response to President Reagan’s “Private Sector Survey on Cost Control.” Two years later, after 161 corporate executives and community leaders directed over 2,000 researchers to investigate government spending, the 47-volume, 21,000-page Grace Commission Report was published.
The $76 million study was funded entirely from private sector donations and cost the taxpayers nothing. The commission made 2,478 recommendations that would save the taxpayers $424.4 billion over three years without cutting essential services or raising taxes.
In a letter to President Reagan dated January 12, 1984, Grace encapsulated his commission’s findings. He warned the president of multi-trillion dollar government debts by the year 2000 should the federal government not act upon his commission’s recommendations.
In this same letter, Grace told President Reagan that “one-third” of the tax dollars collected are wasted and another third not collected. “With two-thirds of everyone’s personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the Federal debt and by Federal Government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services which taxpayers expect from their Government.”
Your slice of the pie
The fiscal year 2004 federal budget is about $2 trillion. The spending in percentages this year looks like this:
22.6%—interest on the debt
Looking at it a different way, if you had $1,500 deducted from your paychecks as an “income” tax and your tax dollars were directly applied to government expenses, your contributions by category would be:
$339—interest on national debt
But, if the Grace Commission is correct, then not one penny of income tax money is actually being spent on services the American People expect their government to provide.
So what is funding government? Tax researcher Richard Standring believes the U.S. funds itself with loans from the International Monetary Fund (IMF).
The IMF was created at the United Nations Monetary and Financial conference in Bretton Woods, New Hampshire, July 12, 1944. Per Title 22, Section 286 U.S. Code, the U.S. became an IMF member in 1945.
Standring followed checks naming the IRS as the payee. He claims the checks go to a Federal Reserve bank, a private banking institution that has never been audited. The money then goes to the International Bank for Reconstruction and Development and is deposited into what is called a “Quad Zero” account. It is from this account that IRS tax refunds are distributed (per 22 USC 286 and 31 CFR 11, section 214.7).
According to Standring’s research, whatever is left over is then transferred to the IMF. From there the money is redistributed among countries throughout the world—including the U.S.—in the form of loans. These loans must then be paid back to IMF bankers at interest.
According to the U.S. Bureau of the Public Debt, Americans were in the red $1.663 trillion in 1984. Twenty years later the debt has increased nearly five-fold to $7.1 trillion.
- Government waste is no secret.
- In 1984 the Grace Commission accurately predicted $multi-trillion government debt by 2000.
- The IMF, not the American people, is funding the operations of government through loan capital it receives, in part, through taxation of Americans’ wages.
- With every dollar paid to the IRS in taxes, America’s debt to the IMF increases—with interest.
- Paying wage taxes supports global banking, not the U.S. government or Americans.
What about schools and roads?
Schools, roads and bridges are not funded by income taxes at all. Property taxes fund schools; roads and bridges are funded by gas taxes; airports, sewer and water systems are funded by user fees.