Tariffs, like we were originally set up. That would prevent the off-shoring, and we would again have strong unions, strong industry and manufacturing. People would have jobs and prospects, and the universities would have a future career. As it is now, the universities have no future.
Rob Kall:
How about inheritance tax? How about capital gains tax?
Paul Craig Roberts:
Well, in regard to inheritance tax, anything that anybody has at the end of their life they have already paid tax on. When you say, "We have inheritance tax," you are simply saying, "We are confiscating part of your property," and so you don't own your labor, you don't own your property.
Now, in regard to capital gains tax you have to be an economist, really, to understand this there isn't any capital gain. Suppose you bought a house for $50,000, and then ten years later you sell it for $100,000. They say "You have $50,000 in capital gains," but you don't, because the replacement cost of the house is $100,000. You don't have any gain. You sell the house, you pay the tax, and then you can't replace your own house.
Rob Kall:
But that isn't fair, because when you are selling your own house, there are tax breaks for that. Let's talk about investment ".
Paul Craig Roberts:
It didn't used to be. That is something they finally put in, because it finally dawned on them that there was no gain there, and you couldn't replace the house you lived in after taxes. The same thing is true of stocks. If you buy a stock and it goes up, what it's reflecting when the stock price goes up " or what it used to be before all the manipulation from the hedge funds " now it's just some sort of a rigged casino - but what it used to be - if the price of a stock went up, it meant the earnings went up. So the government was collecting income tax on the earnings, and collecting it again if the earnings were paid in dividends and interest.
Rob Kall:
OK. So, Paul " I don't get it. How does a county pay for county government, county road services, for schools, for local police? How does the state pay for state roads? How does the judicial system get paid for, if we don't have taxes?
Paul Craig Roberts:
The same way paid for them prior to 1913. I mean, we didn't just get roads and school systems in 1913.
Rob Kall:
Actually, the roads before 1913 were primarily for horses. So, the road system we have, that is the best one in the world,was built with taxes.
Paul Craig Roberts:
...on gasoline. It wasn't built with income taxes.
Rob Kall:
All right, but what I'm trying to ask you is where do you get the money if you don't charge income taxes, you don't charge inheritance tax, and you don't charge capital gains tax?
Paul Craig Roberts:
Well, Rob, Rob, income taxes and capital gains taxes are not the source of the revenues that build roads and schools. The school is based on the property tax, and the roads - at least originally, and used to be - and I think they still are, though I'm not sure - are based on the gasoline tax. So, the income tax " supports the military.
It also supports Medicare and Social Security.
Paul Craig Roberts:
No. No it doesn't. That 's a separate tax.
Rob Kall:
Well, I'm talking about all the taxes on income.
Paul Craig Roberts:
Well, it's the Social Security and Medicare tax.
Rob Kall:
But they're income taxes. They are taxes on income. I mean, you're talking strictly about the Internal Revenue Service tax, and you're talking about state income taxes, and city wage taxes.
Paul Craig Roberts:
Look, Rob, I'm not talking about anything other than reporting that the traditional definition of a free person is and has always been, and has always been recognized by liberals, as a person who owns his own labor.
And this is what was new, this was the transition that Marx made so much about from feudalism to free labor. Free labor was free because it did not OWE any obligations to government. There was no longer a tax on labor. Under feudalism the tax was paid in kind. It was paid in terms of " you had to work a third of your time for the feudal lord, and then you could work two-thirds of your time for yourself. Under slavery, the slave had to work half the time for his master, or his owner, because the other half of his time is what it took to maintain his own life. And in fact there were examples, in American slavery, of slaves who were productive in skills and arts and crafts, being released from their owners to towns where they were paid half their wages, and the other half was remitted to the owner of the plantation. And that's what we have. That's what the federal income tax does. The employer withholds part of your earnings from you and gives them to the government. Now, what we are seeing in this discussion is all the emotions over the years that are tied up with income tax. And these have now become more important than people being free, and owning their own labor. That's what we are seeing in this discussion, and it's the same sort of thing that I was talking about earlier, about civil liberties. "Oh, we don't need those if the terrorists are going to get us." And the Constitution " "Oh, it's in the way of the government protecting us," and, "How can we hold our President accountable?" And you listen to Billy Kristol, for example: "Well, I don't understand how you can be patriotic if you don't support the government. Anybody who doesn't support the government obviously is not patriotic." In other words, what is the Constitution? The government can violate the Constitution, but we have to support the government, otherwise we're not patriotic. All of these kinds of mistakes are everywhere. They are just everywhere. Now, I don't want to say, "Oh, we have to abolish everything." I was just making a point that historically a free person owned his own labor.
Rob Kall:
Paul, if we (accept your premise, we) could say that if somebody has to pay rent, or pay a mortgage on a property, then the money they're putting out for that - especially, say, rent - is their labor, and you could call them a serf because they're paying rent.
Paul Craig Roberts:
No, no, absolutely not, because that is their voluntary choice if they wanted to rent a place. It is nothing about how people allocate their income, as long as it's their choice. But you try not giving the government the income it claims! First of all, you can't do it, because it is withheld at the source. So, most people really can't even cheat on their taxes, because (they) never see the money anyhow. It just goes directly to the government. You have no choice about it, and if you cheat on the government, they put you in prison. It's like the feudal lords. It's like the robber barons. "Throw him in the dungeon! He didn't pay his taxes."
Rob Kall:
But you are suggesting that people can choose not to rent? So, what do they do? Live on the street?
Paul Craig Roberts:
No. Look, Rob " you are conflating the claim of somebody else to a share of your income with you spending your income that you earned. You could say the same thing about your grocery bill. "Oh, what choice do you have but to buy food. Otherwise, you die."
Rob Kall:
Where we agree is that the military is a part of the government that is totally out of control. Both parties have unleashed it, and are afraid to stand up to it, and I really believe that the American military could be the most dangerous threat to American democracy that we face. That, and corporate excesses. But people need roads. They need police. They need schools, and those things.
Paul Craig Roberts:
Why do they need police? The police abuse the hell out of them.
Rob Kall:
We do have problems with the police, that's for sure.
Paul Craig Roberts:
The police are always abusing the public. They have been militarized, and now the function of the police is to control the public.
Rob Kall:
I'm not going to argue with that one.
Paul Craig Roberts:
The police are not on your side.
Rob Kall:
I'm not going to argue with that one.
Paul Craig Roberts:
Go look at Youtube. There are several hundred thousand videos of the police brutalizing people who haven't done anything.
Look, this belief in government is the great Achilles' heel of the progressive movement. I certainly agree that I'd rather have the government helping the poor than funding wars. We are on the same side about that. But, look, why did the government decide to go to wars rather than to help people? Now, that tells you all you need to know about government. So to have faith in government after everything you see and witness and write about, and everything that's on your site, the fact that you've got faith in government is just sort of mind-blowing. It's an organized criminal gang. It has power that nobody else has, not even the biggest corporations. It does what it wants. And, yes, the military is a threat, and the biggest threat in my opinion is the fact that the Constitution is not defended. The federal judges don't defend it. The Supreme Court doesn't defend it.
Rob Kall:
What aspect?
Paul Craig Roberts:
(The Supreme Court doesn't defend any) aspect of the Constitution. What's been done about torture? Torture, under United States statutory law, is illegal. Torture is illegal under the Geneva Conventions. It's a war crime. Nothing has been done about it. Habeas corpus is a constitutional right, as is due process. Nothing has been done (to defend) these things, which are now all destroyed. I'm sure you saw it, and it is probably on your site, that the Bush administration knew that those people they held in Guantanamo were innocent, yet they held them and tortured them for years. And nothing has been done about it. There is no accountability. Nothing. The law schools aren't up in arms. The bar associations and the federal judges go along with it. They preside over these trumped-up, false cases where as I said earlier in this conversation - some federal agent goes and rounds up a gang and does all the talking, and then arrests them.
Rob Kall:
Let's get back to government. What do we do about it? What is your solution? Do you have one? Do you have any ideas on how to fix the problem?
Paul Craig Roberts:
Before the Bush administration, before 9/11, I wrote a book on "How the Law was Lost," because we had already lost it, just from prosecutorial abuse, and because various single-interest groups were determined to chase after their specific devil. We had to get the drug lords, we had to get the child abusers, and in order to get all those people, they decided to get rid of all the legal protections. So we had already essentially lost the law.
Rob Kall:
What's the name of the book?
Paul Craig Roberts:
It is called The Tyranny of Good Intentions. I called it, "How the Law was Lost," and the publisher calls it The Tyranny of Good Intentions. What Blackstone said was, "the law is a shield of the people, not a weapon in the hands of the state." But what my book, COAUTHORED WITH LARRY STRATTON, shows is how each of the constitutional protections of the individual have been turned into a weapon. So, we saw this happening before 9/11. Now, getting to an answer to your question, I said the only solution was a rebirth in veneration and respect for the Constitution. Instead of venerating presidents and governments and political figures, we have to go back to what the Founding Fathers told us. You venerate the Constitution, and a government even your own that goes against the Constitution is your worst enemy, the worst enemy you will ever have.
Rob Kall:
Now, this is what Glenn Beck has been saying.
Paul Craig Roberts:
Well, you know, even an idiot can say something true occasionally.
Rob Kall:
[laughs}
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