The line in Section 8 of Article 1 allows congress to lay taxes to provide for the country, but Section 2 states "Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons". This was modified by Amendment 16, but the Supreme Court ruled that it gave no new power to tax to the government. Basically a direct tax has to be apportioned among the several states.
Reagan commissioned a study during his administration to establish where your income tax dollars go, and the findings were that every single penny went directly to the national debt, not the services that most people think they are paying for. The way it works is that your money goes directly to the national debt, and the Federal Reserve, an incorporated business with civilian owners, lends money to the U.S. Government whenever the Government wants to spend money. this is why we have a national debt. The Federal Reserve says ‘go ahead, we have the money’ or ’we’ll make new money to loan you’ and the government operates on a blank check.
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