Why do our Federal Income Taxes go to a Private Bank?

Question

That seems a little strange to me

Hey you Boston Fed freak, quit answering my questions!

If you enjoy paying your taxes go ahead, I am tired of funding dark projects like the Iraq war and the illegals who abuse our welfare system with thier anchor babies!

They should be putting it all into future securities

Answer 1

WATCH A DVD CALLED THE MONEY MASTERS TO UNDERSTAND WHY THAT IS SO.

http://video.google.com/videoplay?docid=-515319560256183936&q=THE+MONEY+MASTERS&total=1078&start=0&num=10&so=0&type=search&plindex=1

Answer 2

They don't.

I'm going to guess that the source of your question comes from some fringe groups/sites that have made similar statements.

It usually goes something like this (all the following statements are false):
A) All Federal Incomes taxes goes to pay interest on the national debt
B) The Federal Reserve owns all national debt
C) The Federal Reserve is completely private
D) Private shareholders who own the Fed receive these billions

A quick run down of the facts:

A) Federal Income tax revenue: about $800B. Interest on the national debt: $350B. (still atrocious but there are 100s of billions left over for other things)

B) Only 17% of the T-Bills are owned by the Federal Reserve

C) The Federal Reserve is overseen and run by a government agency called the Board of Governors. Individual branches are run as non-profit corporations.

D) By law, all 'profit' (income after expenses) from the Federal Reserve is returned to the Treasury. Since 1913, the Fed has returned about 95% of the interest earned from T-Bills to the Treasury. Not a bad deal for the tax payer.

Does that address your source? If not, add more background info.

Answer 3

You are probably talking about the Federal Reserve. Our income taxes don't go to the Federal Reserve. While the Federal Reserve banks are privately owned, they are controlled by the publically-appointed Board of Governors. The Federal Reserve banks merely execute the monetary policy choices made by the Board. In addition, nearly all the interest the Federal Reserve collects on government bonds is rebated to the Treasury each year, so the government does not pay any net interest to the Fed.

Answer 4

The IRS sometimes contracts with a number of banks to do the initial processing of returns - opening the envelopes, separating out the checks, things like that. A few years there were severe problems with Mellon Bank in this regard, so I'm not sure they're doing that any more.

Answer 5

They don't. Pure and simple.