A Case Study in Insanity

Taxes, upon taxes based on more taxes. The circle of taxation. Broken down below on an arbitrary item, a loaf of bread.


April 2021

A single product in isolation. The journey and the taxation its subjected to. Below is a quote from Ronald Regan

151 taxes on a loaf of bread.

If people need any more concrete explanation of this, start with the staff of life, a loaf of bread. The simplest thing; the poorest man must have it. 

Well, there are 151 taxes now in the price of a loaf of bread — it accounts for more than half the cost of a loaf of bread. It begins with the first tax, on the farmer that raised the wheat. Any simpleton can understand that if that farmer cannot get enough money for his wheat, to pay the property tax on his farm, he can’t be a farmer. He loses his farm. And so it is with the fellow who pays a driver’s license and a gasoline tax to drive the truckload of wheat to the mill, the miller who has to pay everything from social security tax, business license, everything else. He has to make his living over and above those costs. So they all wind up in that loaf of bread. 

Now an egg isn’t far behind and nobody had to make that. There’s a hundred taxes in an egg by the time it gets to market and you know the chicken didn’t put them there!

The tax journey in isolation.

Lets start with the life journey of a typical loaf of bread in a supermarket. This loaf does not just appear by magic, there is a journey and each step is taxed multiple times. (more so in the USA with all the state and city-based taxes) 

Meet Farmer Bob. Bob pays both council tax and business rates on his home and farm. These taxes need to be added to his cost or he would go bankrupt. 

Bob buys some grain to sew, on which he pays his state taxes. But before he gets to this stage, Bob ploughs his land. To do this, in all likelihood, Bob uses a tractor, on which he paid VAT when he purchased it. He probably used Vehicle finance to acquire the tractor. On top of the VAT he paid, he will be paying the “bank loans”, of which the bank will be paying their taxes, so the finance costs are increased to allow for this taxation.

So Bob gets up early in the morning and buys some RED diesel for his tractor. As is the way things are, he pays fuel Duty (36% + VAT) on this diesel, plus he pays VAT on the purchase. So, Bob can now start ploughing his land. So, before we even start, Bob has a lot of taxes he needs to recover, just to break even.

A few days later, the ground is ready for sewing.  Tractor time again, and repeat above taxation. Bob now sews his grain and waits around 3-6 months till it’s ready for harvesting.

This whole time, Bob is paying taxes on his home and his Farm. These taxes need to be accounted for and are added to the cost of that loaf of bread. Harvest done, and Bob has a large pile of Hay and Grain. Enter Trucker Jim. 

Jim is contracted to haul the Grain. But Jim also lives in a house and drives a truck. Jim pays council taxes which need to be allowed for. As Jim drives his truck on the actual road, Jim uses WHITE diesel (80% Duty + VAT) + VAT on the purchase of the diesel. Jim also pays Road tax to be able to drive his truck on the road. Jim pays for his annual MOT. All this is taxation and someone has to pay it. 

The Production Stage

So at this point in our tale, Farmer Bob is no longer in the picture. Framer Bob has paid nearly 85% of the cost of that grain over to the state in one form of tax or another. The next stage of our journey is the grain silo. The grain Silo pay commercial rates, they have staff, they pay their staff taxes, they have utilities, from whom the government add a reduced VAT %. The staff live in houses and pay council taxes, so the Grain Silo company have to ensure the staff are paid enough to cover these taxes.

The next stage is the flour mill, repeat as above, more taxation. Trucker Jim’s services are once again required, and his taxes are once again needing to be covered. The Flour mill is basically the same as the Grain Silo. They have staff, they have utilities, all these means is there is more taxation.

At this point in our little story, the Grain is converted to Flour, so once again, we rely on Trucker Jim to transport it to the Flour Mill. Yup, more taxation needs to be covered in order to get the Flour to the Storage unit before it moves to the Bakery. 

You got it, the Flour storage is basically another silo, which means more of the same taxation. 

Enter the Bakery. They place an order for the flour so they can make the bread. More taxation as above, staff pay taxes on their wages, staff live in houses and pay taxes to live. The bakery is a business and as such pays corporate taxes. It probably pays some form of business rates as it has commercial premises. Bread now baked. The government have the wage taxes, NI taxes, business rates taxes, VAT taxes etc.  

How much is enough?

A couple of chartered accountants have done the leg work and when it comes down to brass taxes, the figures are astonishing. On average, around 85% of the cost of goods is taken up by one form or another of taxation. For certain industries, it’s even higher. Now consider how government departments work: Your police, your fire department, your councils, your NHS and so on. All of these industries are taxed at both source and at the end. As an example – The government give a contract to a supplier for £100 Million, this month is borrowed from the Bank of England via deception. So now, the tax payers owe £100M. This goes on the national debt. But, through one form or another of taxation, the state will claw back £85 Million of this, so the true National Debt should only be £15M, where does the rest go? Why do we still owe so much? The truth is, all the taxes that the state charges are used to service loans, so the only way to keep the charade going, is to borrow more money to pay for the services. Increasing the national debt, increasing the debt on our future generations and creating a never ending cycle as there is no way out of this, while the banks are allowed to dictate policy.

A world without banks

Imagine a world without banks and taxation. Where Governments are there to serve the people. Banks are there to safegaurd our funds. A £300 000 house would cost £45 000. But in the current world, a £300 000 house costs close to £600 000 by the time the bank adds interest to the made up money they just handed over to you, created by you. *you are the true creditor in the transaction, not the debtor. Petrol would cost around 15p a litre. A £50 000 family car would be £15 000. That 15% that we are forced to live on, would suddenly be much more than we ever need to have a happy life. Imagine, no more world hunger, no debt, the leading cause of almost every ailment on this planet is related to money or the lack of it. Suddenly, healthy food would not be a luxury, it would be the norm.