The Working Class Tax Relief Act

One of the most voracious and victim-inducing taxes that can be levied is inflation. The policies of President Joe Biden(D) have resulted in an inflation rate not seen in four decades. According to the Bureau of Labor Statistics (BLS) of the United States Department of Labor, the Consumer Price Index has risen from 261.148 at the beginning of Mr. Biden’s term to 296.311 at the end of June, 2022. The media and the politicians prefer to talk about the annualized rate of inflation – currently at 9.1 percent – but it ignores the cumulative effect on working class people at 12.66 percent since Mr. Biden assumed office.

It represents an additional 12.66 percent tax on the income of every working man and woman in the United States. I say this because, like a tax, it is a charge imposed by the actions of government – in this case the actions and inactions of Mr. Biden and supported by Congress. You can begin with Mr. Biden’s decisions to cancel construction of the Keystone Pipeline, withdraw federal lands from oil and gas leases, and increases the rules and regulations for obtaining permits to drill on private lands – it was his first steps to “getting rid of fossil fuels.” As a result rates for fossil based fuels increased over forty percent according to the BLS.

Add to that Mr. Biden’s decision to impose yet another $1.9 Trillion in government spending as a so-called stimulus despite the fact that the economy did not need additional stimulus. The federal government does this by printing additional dollars and putting them in circulation. The result is more dollars chasing the same amount of goods produced. And under the inescapable rules of supply and demand, where there is an increase in demand (dollars) and a static amount of goods produced (supply), prices go up creating inflation. The proof of this is that the federal government is now trying to cure inflation by reducing the amount of dollars in circulation by increasing interest rates and reversing quantitative easing (burning dollars received when government securities mature). (Of course Mr. Biden and the Democrats, having ignored the problem they created by the last round of “stimulus” are preparing another multi=billion dollar package of additional spending thereby exacerbating the problem.)

And finally, while Mr. Biden dozed while the international supply chains collapsed in large part because America’s west coast ports were stalled with labor unrest and government imposed sanction against independent (non-union) trucking operators.

As inflation began to grow business became concerned about the inevitable recession (which we have now confirmed with two consecutive quarters of negative growth in the Gross Domestic Product index) and they began to temper expansion decisions thus feeding the inflation by limiting growth in goods produced. So that is the end of the tutorial unless you want to go back and read the excuses of the liberal economists who are trying to change the definition of “inflation” in order to avoid responsibility in encouraging Mr. Biden and the Democrats to go ahead and spend and spend and spend. Mealy mouthed idiots to a (wo)man.

So what can the states do about inflation because we know darn well that the morons in the White House and the Congress won’t do anything more than point fingers. It’s pretty simple. Provide a tax refund in the amount necessary to return the purchasing power of the average income to pre-inflation levels and then index that amount until inflation drops below 3.8 percent on an annualized basis. (The 3.8 percent reflects the average annual rate for inflation over the past fifty years.) Assume that the annual taxable income for a household is $50,000. Applying the average annual inflation rate of 3.8 percent it would suggest that you would have to earn $51,900 to maintain the average household purchasing power. Based on the inflation rate to date imposed by Mr. Biden and the Congress – 12.66 percent – you would have to have an income of $56,330 in order to restore the purchasing power of the previous $50,000 taxable household income. In other words, the government’s action have imposed an additional economic burden on the average household of $4,430 and that is the amount it owes you.

To ensure that it is an equitable application – you know that liberal/progressives love “equitable” – you apply it uniformly based upon the average household income thus applying it equally to everyone. Thus the person earning $400,000 will receive the same refund as the person earning $50,000 – not the same percentage, the exact same amount. (I justify this based on the sure knowledge that inflation imposes a greater burden proportionally at the lower end of the economic scale than at the upper end.)

The proposal has the ancillary effect of reducing tax revenue to the state and thus enforcing greater fiscal discipline – or in Oregon’s case over the last two decades, any fiscal discipline. It also requires the government to think ahead to the consequences of their actions to mitigate against those actions that would increase inflationary pressure.

Now you might wonder why you would impose the burden for reimbursement on state governments when it is the federal government that has imposed the super-heated inflation? It’s pretty simple. The federal government doesn’t give a damn about the burden they impose on working men and women. It might, however, listen the voices of discontent from state governments when burdened with cleaning up the mess.

In the end, you are responsible for the government you elect. If you vote on the basis of personalities, or identity, or any other strain of wokeness you will continue to get the Joe Bidens, Kalamata Harrises, the Kate Browns and the other liberal/progressives who are destroying our cities and states by excessive taxes, excessive crime, and excessive spending. The best way to limit government is to limit its spending.