Patriot,

I've been warning about the Federal Reserve for many years. The
Fed is the root cause of price inflation, which is now
skyrocketing and destroying our national prosperity.

At the same time as the Fed is covertly confiscating the wealth
of the American people, the IRS is overtly doing the same.

As I show in my latest column, this two-headed monster isn't
going after the billionaires Joe Biden says they are, but
targeting working-class people and hurting them most of all.

If you haven't already seen my column for this week, you can read
it below.

And of course, if you haven't already done so, be sure you sign
the petition to Audit the Fed, and encourage others to do the
same.
[link removed]

-Ron Paul


The Inflation and Tax Assault on the American People

According to the January report of the Consumer Price Index,
price inflation increased by 0.5 percent last month. This follows
a 0.1 percent increase in December. The total increase over the
last 12 months is 6.4 percent. The official government
statistics, which are manipulated to understate the true rate of
price inflation, show even greater increases in some costs. Over
the last 12 months, food prices increased by 10.1 percent, energy
prices increased by 8.7 percent, and shelter costs rose by 7.9
percent.

The government's figures also record a 0.2 percent decline in
real wages in January and a 1.8 percent decline from a year
earlier. Keep in mind that actual real wages losses have been
larger because the government's real wage numbers are calculated
using the government's understated price inflation numbers. The
Federal Reserve-caused decline in purchasing power
disproportionally harms middle- and lower-income Americans, many
of whom were already living paycheck to paycheck before the
Federal Reserve's unprecedented money creation caused especially
large increases in price inflation.

According to a Morning Consult survey from June of 2022, price
inflation has caused over 40 percent of US consumers to eat out
less. This obviously reduces the opportunity of wait staff to
earn tips that constitute a significant portion of their incomes.
This loss is in addition to the lost income from during the
coronavirus scare, when many restaurants either closed entirely
or only offered takeout or delivery.

The reduction in tip income is not stopping the Internal Revenue
Service from trying to squeeze more taxes out of waiters and
waitresses. The tax agency has announced this month the creation
of the Service Industry Tip Compliance Agreement (SITCA) program.
As the name suggests, the program will allow the tax agency to
collect data on tips directly from restaurants, instead of
relying on employees to report their tips.

SITCA is one of the first initiatives to use some of the 80
billion dollars in additional funding provided to the IRS in last
year's Inflation Reduction Act. President Biden and other
supporters of the legislation said the funds were to enable the
IRS to crack down on millionaire and billionaire "tax cheats."
President Biden and the bureaucrats running the IRS must think
there are a lot of waiters and waitresses making billions in
tips.

At the time of the bill's passage, many opponents of increasing
the IRS's enforcement budget predicted the agency would use the
additional funds to target middle- and lower-income Americans.
After all, unlike wealthier individuals, these Americans cannot
afford tax attorneys and accountants to make sure they minimize
their tax liability without violating the tax law. Also, wealthy
taxpayers are more likely (and able) to fight an IRS audit. In
contrast, lower income Americans are more likely to pay whatever
the tax agency demands in order to make it go away since they
don't have the resources to fight it.

When I was in Congress, I introduced legislation to make tips tax
free. Tips are a gift provided by customers to show appreciation
to servers. Very rarely is there a contractual obligation for a
customer to add a tip (much less a pre-determined amount) to his
bill. There is no reason to tax tips other than the government's
desire to take more money from working people.

The fact that the funding the IRS was given to prevent the
wealthy from avoiding taxes is actually being used to target
waiters is an example of how the welfare-warfare state harms
working Americans. At the same time, lower- and middle-income
Americans are harmed the most by the Federal Reserve's inflation
tax. The best thing Congress could do to help Americans improve
their standard of living and climb the economic ladder is to kill
the monsters of 1913 - the Federal Reserve and the IRS.




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