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No More Economic Toxins!As we grow up in this technologic world, we encounter worrying trends. One such trend is pollution. We know that our water is polluted mostly by chemicals (some even placed in there purposely such as Fluoride) and sometimes bacteria. Air is full of particulates and toxic gases. The soil is contaminated with pesticides, heavy metals (Lead, Manganese, Mercury and so on) and other toxins. Our food is, particularly the processed type, is heavily contaminated with GMO (Genetically Modified Organisms). Our electromagnetic environment is contaminated with electromagnetic waves coming from all kinds of transmissions (radio, tv, phones, wifi and so on). Hell!, even light is contaminated with ultraviolet light thanks to the destruction of the Ozone layer. And let's not forget the weather, which is contaminated by global warming (arguably caused by the greenhouse effect). We could go on and on with this subject, but why bother? You already know the reality.

No, today we are going to talk about something much more hideous, much more devastating and much more lethal that has eluded public scrutiny since… well… ever! We are going to be talking about tax pollution.

We all pay taxes. We all hate paying taxes (except the two guys over there at the back corner of the room – there are always clueless people somewhere…). Nobody understands taxes (see Taxes And Myths). We all procrastinate about taxes. We all know we are being robbed through taxes (see The Illogic Of Taxation Thievery At Its Best). Yet… we never give a second thought to how widespread they are.

If we look at pollution, two things become obvious:

  • There is usually a way out
  • We do get benefits

With many types of pollutions there are usually technological solutions that depend upon us. If water is polluted, we can purchase a Reverse Osmosis filter which will remove all nasty pollutants. If the air is pollutes, we can move to a different place or denounce the polluters to the government (fingers crossed). If the soil is polluted, we can replace it. If the light is polluted, we can use sun blocking lotions. These solutions may not be great, but at least they do exist and are fully dependent upon our personal decisions.

The second issue with pollution is that it is mostly a consequence of our industrialized society. Industrialization is the process that enabled our lifespan to go from about 30 years in 1700's to 65 in the 2000's. Industrialization is good, but one of its side effects is pollution; this much is true. However, at least we got something (actually a lot) out of it!

And so, ecological pollution is not that bad considering everything. Of course, there is always room for improvement and we wholeheartedly wish it would improve sooner than later. But these are the facts.

Now, let's take a look at Tax Pollution.


With few exceptions (typically US, Canada and the Value Added Tax in several countries) taxes are invisible. Technically speaking, they are called "at–source". This means that the government steals your money even before you get it. What you get is some money and a receipt where you can (usually) see the deducted tax. This happens when you get your salary or when you buy a product.

Psychologically speaking this is a good idea… if you are the government. People are mostly visual creatures. They have to make an effort to fully comprehend what numbers mean. When you receive your wages you are looking at how much money you got; not how much money they stole. Even when you look at your money, you usually skimp over because you do not translate wages automatically into products or services. What all this means is that for any intent and purpose, taxes are invisible.

This invisibility has several advantages, the main being that they can keep raising taxes with very little negative impact on votes.

Another advantage is that people get used to taxes. It becomes part of their lives. They don't think twice about them. Hence, politicians can keep milking people with no negative consequences because there is no differentiation between political parties. All parties want to collect taxes.

But the vilest of all these advantages is tax pollution. As taxes are invisible, they can tax everything and get away with it. This is precisely what they do. They tax everything. Think about it, is there any product or service in your country that is not taxed at the end user level? Typically through some sort of sales tax or value added tax?

Yes, some products are tax–exempt. They are mostly related to basic human necessities such as selected foods and clothing. But even this scheme has a nasty connotation. Politicians "exempt" goods or services from taxes because it is in their best interest to do so (remember? Vote maximizers?); however, even this fact is manipulated to create propaganda for public consumption. Through the "exemption" process, politicians are "protecting" the most vulnerable members of our "society". Hence, they turn what is robbery into a virtue!

And so, beyond this small handful of products, all other products are taxed at the end user level.

In other words, tax pollution is absolutely widespread. Almost all products and services are polluted with taxes.


End user taxes are mostly invisible, but some could still be seen. However, manufacturing taxes are totally, completely and utterly invisible. As consumers we have no idea whatsoever how much taxes are companies paying. Although it is true that it is possible to estimate this number if one is willing to spent countless days researching data and performing calculations, in truth, who has the time and stamina to do just that? Life is too short.

Basically, when we buy a product or a service, we can't see how much money is the government already syphoned out from our purchase, even before we spend our money!

Taxation is an inverse pyramid sort of scheme. Taxes are fewer the closer one gets to raw materials and they increase the closer one gets to the end user. It this structure (and the fact that they are invisible to people) that taxes in the manufacturing side of the economy can be increased enormously without negative consequences (for politicians). Typically, manufacturer's do not complain about taxes because they understand that the game is rigged.

Let us put it this way. As a manufacturer would you:

a) Stand-up for your customers, complain to the government for tax increases and suddenly become a "person of interest" by the Taxation Authority (aka God?) or,

b) Shut–up and quietly pass on to unsuspected customers the tax increase and keep pocketing your profits

Almost all manufacturers choose b) as it is only human nature. No they are not evil, they are simply responding to the natural evolutionary instinct of being selfish.

And so, the government is free to tax everything in sight hence extending tax pollution to even the darkest corners of the economy. They even tax illegal activities! Remember the famous case of Al Capone? He was judged for tax evasion, not prostitution, gambling, liquor selling, murder, blackmail, racketeering, or a proverbial litany of other serious crimes. No, taxes come first.


Is human nature that enables governments to pollute all goods and services with taxes. In the end, if one adds end-user taxation and manufacturing taxation, there isn't a single product, anywhere in the world, that is not taxed at some level or at least once.

This pollutant, tax, is the most efficient, most encompassing, more uncompromising pollutant there is. At least ecologic pollutants are selective to a degree. Particulates in the air usually do not pollute water. Fluoride in water does not pollute rain. GMOs do not pollute the soil (at least not for a long time – they decompose). Carbon monoxide does not pollute our electromagnetic environment, and so on.

The only pollutant known to man that has spread through its own ecologic system to every single element in it is taxation. Taxation is the most successful pollutant known to man.


With normal ecological pollutants, we have a way out and there are benefits (significant ones).

Now let's analyze these two characteristics for tax pollution.

Is there any way out of tax pollution? In a word, no. Of course, super rich people or country owners (such as the Saudi family) can minimize taxes (and they do), but they cannot eliminate them. This is not to say that they care about the pitiful amount of taxes that they pay; they do not. However, technically speaking, they do pay taxes; and we are talking about the most powerful people on earth!

And so, no matter what you do or who you are, you pay taxes. There simply is no way out.

How about benefits? Do we get any benefits from taxation? The answer is no. What we get are apparent benefits. It is true that some people receive "free" goods and services (food, shelter, health care and so on). However, in order to determine if they are better off with or without taxation we need to look at the big picture. And the big picture is not flattering.

If taxation would not exist, world–wide economies would have grown at about 4% to 5.5% per year of real growth (depending of which data one takes into consideration – even though during the historical period used to arrive at those numbers there were some taxes). To understand this small number, we need to understand that this is compound growth. The first year the economy grows let's say 4.75% (the average of above numbers). The second also grows 4.75% but we need to add the 4.75% growth from the previous year. This means that the total growth was 9.73%. The next year is another 4.75% and so forth. In 50 years, the total growth would be 917%, in 100 years 10,261% and in 200 years 1,073,410%!!! In other words, if taxation would not exist, we would be about 10700 times richer than our ancestors from 200 years ago.

Now, what is the real number for the world GDP growth over the last 200 years? The number is approximately 5300%. This is we are 53 times richer than our ancestors from 200 years ago.

Now compare these numbers: 10700 vs 53. Do you notice a "tiny" difference?

This "tiny" difference is primarily due to taxation, but more importantly, due to the pervasiveness of taxation, its pollution effect.

Let's place this number into perspective. Let's divide 10700 into 53 and we get roughly: 200.

Now, take your yearly or monthly income and multiply it by 200. This is the amount of wealth that you should have if taxation would not exist. Now, how do you feel? Sick enough? Do you still believe that we get "benefits" from taxation? Do you think that the so–called "fair wealth re–distribution" through taxation makes sense when comparing 10700 to 53?


Whenever possible politicians design taxes to be stealthy. Among them we have inflation and many others. However, the stealthier taxation that we suffer and politicians don't even know about its existence, it the decrease in standards of living due to compound taxation. We have seen the calculation above. We know how much we have lost. But is this assertion fair? Is it fair to look at what could have been? Yes! Absolutely, positively and definitively yes. This is actually standard economic theory (i.e. mainstream) and it is called the "opportunity cost". This is, if you are doing something you cannot do something different. The profits from each activity are different and so if you obtain one profit you cannot obtain the other.

This squarely applies to taxation because by taxing us over the last 200 years, the government forced us to obtain much, much lower profits from our efforts, hence, denying us much, much larger profits. The government robbed us from our "opportunity cost" to be wealthy. This is the saddest truth that not too many people know.


Taxation is the most polluting element known to human beings. Nothing in nature approaches its destructive power. We have been robbed of our future for the last 200 years and this process continues to accelerate. We cannot opt out from taxation. We get no real benefits from taxation. We are doomed… until history takes its course. However, we can still choose not to be ignorant. We can still recognize the truth and let other people in. We can choose. Choose wisely.

Note: please see the Glossary if you are unfamiliar with certain words.

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