It’s Free Money from the Government!

It interested me to learn yesterday that the Federal government decreed to give me a considerable sum of cash more than the full amount of income tax withheld from me. You read that right—not only do my tax deductions and tax credits allow me a return of the full amount of my federal income tax withholdings, but the total of tax credits actually push the figure beyond that full amount by a considerable sum. Thanks to Obama’s Stimulus Package, changes and additions to the tax credits have created this situation. It’s free money from the government! Or so it seems.

What does this mean? What is the import of this situation? Does it mean that your beloved libertarian-minded, anti-tax, limited government preacher, and very author of God Versus Socialism has himself become a benefactor of socialist handouts? One may be tempted to draw such a conclusion. Has Obama made a socialist out of me? Have I, at last, despite all of my preaching against socialism, become part of the problem instead of the solution?

In my defense I tried to decline it. The poor “Tax Specialist” preparing my return gasped in disbelieving shock. She couldn’t understand why I would not want “money the government has given you.” “That’s to you,” she explained. I needed no explanation: “It’s money I didn’t pay in. I don’t want to take money that’s not mine.” She didn’t understand the simple precept I was driving at—i.e. the eighth commandment. “It’s a credit, from the Stimulus.” She began to rehearse the whole column of the tax form again. “I know the government is giving me a credit. I know the legal aspect of it. But, I have a moral interest in not taking it.” She stuttered, utterly confused. Moreover, she seemed to imply that she had no way to make the software exclude the surplus credits. I gave up. “Never mind. I’ll deal with it a different way.”

So how do I deal with it? What do I do with this subsidy—money the government gave me which was not mine to begin with? Well, we need to address a couple of things here. Before we consider how to deal with it, we should first consider how exactly to understand it.

Understanding is the starting point. Understand this: because we live in financial world dominated by central banks and fiat currencies, we live in a world that that is inescapably subsidized. The problem lies at the root—nay, the very existence—of fiat currency. When the government prints more money to fund its schemes—be they welfare schemes, warfare schemes, bailout schemes, etc.—it devalues the money already in circulation by a proportionate amount. This is indirect, stealthy taxation. It is de facto robbery of my (and your) wealth without ever directly raiding my home, paycheck, or bank accounts. Well, somebody receives these funds. In fact, lots of people do. These receipts constitute a subsidy. To the extent that the institutions or companies receiving these funds—or borrowing from the banks that do, use those funds for products and services—to that extent we must say that these products or services are subsidized. In today’s bailout nation, that’s just about everything.

This problem affects the global economy. You can hardly buy any product or service that is not in some way, at some level, affected by a subsidy. This especially applies to products and services imported from nations where the levels of taxation and socialism are much higher than our own. Is there any Chinese import not undergirded by both direct and indirect subsidies? Guess what? When you buy one, you have indirectly received a government subsidy. One could trace this type of reasoning pertaining to raw materials, agriculture, transportation, education, banking, and nearly every area of commerce and life. We live in an inescapable web of subsidies. This, of course, skews markets, reduces choices, stunts freedom, and creates millions of jobs for bureaucrats and IRS agents. But currently, we have no choice. But I repeat myself.

The government takes both directly (taxes) and indirectly (inflation) stolen hoards of cash and uses them to fund its agendas. The recipients of this cash are guilty of theft by receiving stolen goods. This is true to the extent that any person, business, or institution receives more than the amount of cash stolen both directly and indirectly from them. This is, of course, the very problem I must weigh in noticing what amounts to subsidize in my own tax return.

What has the government taken from me? It goes far beyond the actual sum in the Income Tax brackets. We must also factor in the amount of my wealth government has taken through indirect means of inflation, and not for this year only, but so far for my entire productive life.

We must also consider that government gradually expropriated my funds throughout the year, beginning with the first paycheck early in January. From that point on, it banked my money in its own accounts, drawing interest for itself that would have been mine. This is one of two reasons the government instituted income tax withholding to begin with. First, it reduces the shock of the tax burden by spreading it out over smaller increments. If people had to see the full tax bill and write a check for the full amount at once, there would be two things: greater resistance to paying income tax, and a large number of defaults by people who had not set aside the necessary sum. Second, withholding allows the government to gain more by immediately pooling tax revenue that generates interest. But in doing so, it robs us of not only our capital, but also the interest we could receive by investing that capital. This must be factored in as well, and it must be factored in, again, over the course of a whole productive life.

Finally (for now, but surely not in exhausting the subject), we must also consider the many years I paid taxes well beyond what I received in returns. As a young single man, years ago now, my returns paled in comparison to a single-income married couple with three children. During the younger years, I paid in well more than I received as surplus, which is simply to say I paid taxes. This goes not only for income tax (part of which I got back), but also Social Security payroll taxes (which I very well may never see again), as well as property taxes, etc. Consider all of these over several years as well.

So, a proper understanding of the situation must also take into account eroded capital due to inflation, lost interest on withheld capital, and lost capital in past paid taxes, and all of this over several years. I can pretty well guarantee that the “subsidy” I received this year hardly rivals the greater sum that government has taken from me to date. Truly, I don’t feel so guilty.

This does not mean, however, that we may draw money from the government at will, signing up for every benefit program so as to “get my fair share.” As Christians taking pains to be honest, we must prefer to draw no money beyond what we could show has been taken from us in past losses. Anyone consciously and willfully receiving true subsidies beyond this amount is morally culpable as a thief before God, no matter what the government says you’re entitled to. Handouts should only be taken from genuine charitable organizations funded by voluntary donations. This absolutely excludes governments which are by definition funded through coercive means.

If we as Christians and conservatives intend to keep pushing the “cut spending, cut taxes” Tea-Party-type message as a social agenda, then we must take pains to reduce and eliminate our own financial hypocrisy where it may exist. I was appalled, for example, to learn that my local State senator voted in favor of a State hospital tax in order to balance the State budget (rather than the obvious but politically unpopular measure of cutting spending!). The irony of this tax lies in the fact that it will not raise nearly enough money to balance the State budget, but, Bingo!, it does qualify the State to receive extra Federal Stimulus package funds! $216 milllion in tax revenue plus $654 million in Federal Stimulus aid will allow Georgia to balance its books. Bet you didn’t know that even other governments could get free money from the government.

And the hypocrisy? The bill was pushed through the State Senate by conservative republicans. My own local State senator who would line up to condemn Obama’s bailouts, spending, Obamacare, etc., etc., are the first political pansies to cave and line up at the Federal bailout trough like pigs. I am proud of my own State House Rep who voted a principled “No.” I am also proud of the few Senators who opposed this bill, and are now calling out the wildly hypocritical Pelosi-style strong arm tactics that fellow Republicans used to force the bill through.

Apparently many states are now joining into this scheme that Obama built into the Stimulus package. This means, of course, that the package was designed in part to encourage States to increase taxes specifically on hospitals as a measure to help fund the government program Medicaid. It’s a great scam, if you’re into scams.

Even worse, our alleged conservative leaders used language identical to the liberals in order to defend their rank socialism (which is also identical to that of the liberals). One article quotes,

“This is about (helping) a woman with a child in poverty,” Senate President Pro Tem Tommie Williams, R-Lyons, said. “And this is about the aged, blind … we’re choosing to do this because we believe you should take care of the least of these in society.”

I can’t accept this as anything other than a greasy, hypocritical lie. They chose to do this because it was the easiest way to keep the State from going bankrupt on their watch, thereby leaving them with the bad political legacy. They chose to do this because they could expropriate wealth from the Federal level in order to shore up their own socialist agenda. They did this because they believe government should be a nanny and a nurse, which is to say, they did this because they don’t believe free private individuals and charities should meet these needs. In short, our local alleged fiscal conservatives are choosing to do this because they believe in Socialism.

This is the kind of charity and “care” we don’t need. It is based on theft and redistribution of wealth. It perpetuates the problem and deepens it rather than freeing people to a position in which they can save, prosper, and restore others meaningfully.

This brings me to the second consideration of how to deal with my “subsidy.” Now properly understanding my little “subsidy” situation, what should I actually do with it? I have recently adopted the idea of using what tax returns I get to complete and supplement tithes and offerings. I find these little “windfalls” an excellent time to give charitably. I will end up giving away most if not all of what I receive from both Federal and State returns this year. I encourage you to do the same. Most people have not budgeted so that they need their returns to fulfill their standard operating expenses for the year. Many rather spend the money on something they want—a little splurge of some sort. Some possibly save it. Some may use it to pay down debt, and this is a good usage. It would be great if many would see the influx as an opportunity to help worthwhile charities.

I like Compassion International, LIFE Outreach International (especially their food and water programs), and any of several water-well missions for undeveloped communities, like Water for Life, Water for People, or Pump Aid. Of these, I prefer LIFE Outreach’s Mission: Water for Life because it is run by Christians and does not partake of UN rhetoric about “sustainability” or “water is a human right” nonsense as some of the others. But clean drinking water is the first step on the path to a prosperous society. That’s a great and redemptive social cause. And a mere $4.80 will factor enough to provide a lifetime supply of clean water for one child. A full well costs $4,800 and will supply a village of 1,000 people.

There are a thousand other great ways to give. Think through your giving. Don’t necessarily pile more money on what’s popular. Find uniquely helpful and overlooked ways to give. This is a challenge, and I still have a little research to do for myself. But it’s well worth the effort not only to give, but give wisely. Leave comments below on creative and/or powerful ways in which you give or intend to give.

Of course, in your looking, you may also wish to consider American Vision for a donation. We greatly appreciate it, and can always use the help.

Charitable giving like this is essential to overthrowing the financial tyranny we currently live under. We cannot expect government to relent on its Messianic power trip unless, at the very least, private charity meets the needs government itself claims to alleviate but really exacerbates. We must show that there is no such thing as free money from anyone. “Free money from the government” is actually stolen by force in some way shape or form. “Free money” given freely in charity must have been earned through work in some way. It is much closer to “free” than government subsidies. One of these methods is the work of God. One is the tyranny of man. The tyranny will continue at least until we learn to do God’s work God’s way.