The Biggest Scam In The History Of Mankind (In 7 Easy Steps)
Posted in the Georgetown Forum
#1 Jun 21, 2014
It seems that the government always gets its money back and more through tax. For example:
1. The Gov does 100 dollars in spending, which ultimately goes to into someones pocket.
2. This income is taxed (lets say 20% on average)$100 - 20%= Gov gets 20 dollars
3. People spend their income ($80) on things which then translates into income for someone else, which is then taxed at 20%.($80- 20%= Gov gets $16 more dollars)
4. This process repeats until the initial 100 dollars is taxed over and over until the government gets all its money back
5. People also borrow money, they spend the borrowed money which is also taxed, over and over again. Using the fractional reserve system of 1:10, this means the government would actually receive 10x in tax back compared to the original loan.
So what am I missing? I obviously have something wrong, else the government could pay back its loan no problem. Yet it seems to make sense as when money is spent, it is taxed. The person who receives the money that was spent, gets taxed as well due to it being income. When they spend it, it is taxed and the receiver pays tax on it again due to it being income--this goes on until all the money is recouped.
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