Federal Income Tax
The Federal income tax was never a vision of our Founders. In fact it was unconstitutional until it was created by the Sixteenth Amendment in 1913.
Like the Seventeenth Amendment, the Volstead Act which was passed in the same year and created prohibition, it is a bad idea which should be repealed.
The income tax system has been attacked as a form of involuntary servitude. The IRS lays claim to the first fruits of our labors through withholdings. At year end, we must petition them for a refund if we feel that we have overpaid. We lay the deepest secrets of our financial lives open and naked before the taxman.
The initial tax rate was established with rates beginning at 1% and rising to 7% for taxpayers with income in excess of $500,000. Less than 1 percent of the population paid income tax at the time. My, how far we have come.
As the ambitions and scope of government grew so did its hunger for money. Today the top marginal rate stands at 33% and will increase to nearly 40% if President Obama allows the Bush tax cuts to expire as he has promised.
Added to this burden is the fact that lawmakers do not believe that all income is created equal. Federal lawmakers have carved out a labyrinth of exemptions and loopholes to reward favored constituencies and to punish those less favored. The Federal Tax Code has grown to 67,024 pages by 2008. In 1976, president-to-be Jimmy Carter called for ‘‘a complete overhaul of our income tax system. I feel it’s a disgrace to the human race.’’ Since that call for reform, the number of pages of federal tax rules has roughly tripled, according to CCH.
Source: CCH Inc. Number of pages in the CCH Standard Federal Tax Reporter, www.cch.com via cato.org.
The income tax code has turned us from being a people focused on growth and creativity into a nation bookkeepers, tax avoiders, evaders and cheaters.
Over 120,000 American’s make their living at the IRS collecting taxes from their fellow citizens. On the other side of the field, American taxpayers employ and army of nearly one-and-a half-million (!) tax preparers and advisors to help them minimize their tax burden. Imagine the savings and prosperity we could generate by freeing up these people for more useful and productive enterprises.
Federal Income taxes represent about 45% of the Federal Government’s revenue. Eliminating the income tax would still leave enough money to support a big Federal Government of the about same size that we had in the 1990s. Most importantly, it will compel citizens and lawmakers alike to reconsider the enormous and intrusive role that the state plays in our lives.