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The Immensity of Invisible Taxation: At What Cost to America?

Italian economist Vilfredo Pareto was extremely critical of Italian economic policy in the late 19th century. Pareto noted that Italy suffers from "protection on the one hand and excessive state expenditures on the other." By these means are free economies strangled as they attempt to deliver what is demanded of them.

Italy is famous for its tax evaders. Italians, like Americans, demand massive government services, but don't like paying for them. Unfortunately for Italians, they can only evade visible taxes. The invisible taxes hit them and hit them hard, just as they do Americans.

Milton Friedman's insight into the tax issue is illuminating: "The true cost of government to the public, is not measured by explicit taxes but by government spending. If government spends $500 billion, and takes in through taxes $440 billionwho pays the difference? Not Santa Claus."

We all pay the difference as our government borrows and pays interest on the debt. Our yearly deficits are a hidden tax.

Friedman continues: "The thing we must keep our eye on is what government spends. That's the measure of the amount of resources of the nation that people cannot individually and separately decide about. It's a measure of the amount we turn over to the bureaucrats to spend on our behalf."

Obama's $1 trillion per year projected deficits are an enormous drain on individual freedom. We as individuals will not be allowed to make decisions on how to spend that money. As Friedman noted, Obama has now turned that enormous leverage over to the bureaucrats. Quite intentionally, as I hope to demonstrate here.

Hidden taxes mean no tax resistance. You don't resist what you don't know about. As such, they are a boon to those who wish to wrest control over trillions of dollars, those extraordinarily wealthy Democrats, such as Soros and Buffett, who are not satisfied with their billions.

Deficits are always paid for, one way or the other. We may perceive the resulting government programs as benefits, but someone must pay for them. They are never free. Exactly who pays for them and how do they pay? Every American pays for them in the form of higher costs of consumer products and services.

Deficits are a regressive tax. Since poor people pay a far higher proportion of their income to buy necessities, they therefore pay an astonishing large chunk of that income to support the government's deficit spending.

But by far the greatest burden falls on the

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