“Inflation is the one form of taxation that can be imposed without legislation.” -Milton Friedman
On Oct. 11, 2023, US President Joe Biden announced his public support for the Federal Trade Commission’s (FTC) newly proposed ban on hidden fees and junk fees, which mask the cost of concert tickets, hotel rooms, and utility fees.
“These junk fees may not matter to the wealthy, but they sure matter to working folks in homes like the one I grew up in,” Biden said.
Added fees — whether hidden, bogus, or complete junk — do add real costs to consumers. These fees can make it difficult for families and individuals. Some of these fees may include:
- Convenience Fees
- Prepaid Card Fees
- Overdraft & Nonsufficient Funds Fees
- Late Fees
- Drip Pricing
- Hotel Resort Fees
- Mandatory Apartment Fees
- Bankwire Transfer Fees
According to FTC Chair, Lina M. Khan, “By hiding the total price, these junk fees make it harder for consumers to shop for the best product or service and punish businesses who are honest upfront. The FTC’s proposed rule to ban junk fees will save people money and time, and make our markets more fair and competitive.”
Reuters also heard from Lina Khan on Tuesday, where she stated, “These junk fees function as an invisible tax that quietly inflates prices across the economy.”
What should disturb the average American is not that the government wants to combat junk fees imposed by various businesses and industries. Instead, the concern should be that our government, at all levels (city, county, state, and federally), is not being held to the same standards as the people they govern regarding “invisible tax[es] that quietly inflate prices.” The FTC and Biden administration can make political claims that so-called “junk fees” are harming Americans, but they dare not mention the exorbitant costs brought on by taxation and monetary inflation.
At almost every step of the market, the government is taxing producers and consumers alike. Want to earn an income? Tax. Want to start a business? Tax. Want to sell something? Tax. Want to buy something? Tax. Want to employ someone? Tax. Want to make a profit? Tax. Want to invest? Tax. Want to “own” a home? Tax. Want to “own” a vehicle? Tax. Want to die? Tax. Want to literally do nothing with your money? Tax.
Many of the junk fees passed onto consumers are directly related to the taxes imposed by the government. As of 2022, wireless cell phone taxes by the federal government averaged a monthly 12.24% of the total bill, and the North Carolina state government imposed an average additional 9.04% tax, totaling 21.29% monthly tax to use a cell phone.
North Carolina also imposes an average of 38.75¢ tax on every gallon of gas, 4.75% sales tax with up to 2.75% tax by local governments, 0.82% tax on current house value, and 4.75% income tax. Per capita, North Carolina extorts more taxes on average per capita than Tennessee, South Carolina, Georgia, and Florida.
Even in North Carolina, as reported by Bill Capps at the John Locke Foundation, the monopolistic North Carolina Alcoholic Beverage Control Commission imposes so many hidden taxes that it takes a $13 bottle of liquor and turns it into $26. Government apologists will usually resort to a statement of protectionism to justify their hypocritically unjust overreach via taxation and hidden costs.
Since 2019, the US government has been printing and giving away money left and right, near and far, causing serious concern for the stability of the US dollar. Sending money to Ukraine, Israel, Saudi Arabia, and welfare programs here in the United States, etc., creates a false sense of improved gross domestic product (GDP) when those dollars return to specific industries.
However, what’s worse is that the value of the fiat dollar is watered down on a grand scale much like the effects of mass counterfeit currency. This monetary inflation tends to lead to price inflation, which is a direct symptom of this monetary scheme. The deterioration of the purchasing power of currency directly impacts American families and individuals, whether they realize it or not. Monetary inflation is a hidden tax on Americans, and it is certainly a hidden junk fee without representation or real legislation.
In 2020, it was reported that over 80% of US dollars in circulation since 1913 were printed between 2019 and 2020.
The inflation that this hidden tax has cost Americans and holders of USD has been abominable. What was $1 in purchasing power in 2019 now requires at least $1.20, as of September 2023.
According to economist Peter Schiff, in the United States, we now have more adults in their 20s and 30s living at home with their parents than ever before. This is another sign of serious decline in the standard of living in the US caused primarily by government taxes, bureaucracy, and monetary inflation.
If the US government wishes to impose restrictions on companies, it should start with itself by removing hidden costs of taxes at all levels and ceasing monetary inflation schemes that are destroying the USD. This hidden tax of inflation is also greatly harming the economy and costing families and individuals everywhere.
North Carolina can continue to act independently, helping families and individuals by reducing the tax burdens imposed. A lot has been done to reduce income tax and corporate income tax, but a lot more can be done. Fewer taxes would mean less junk fees for families and individuals alike.
Original Publication: https://www.carolinajournal.com/opinion/taxation-and-inflation-the-real-junk-fees/
