The income tax usurps privacy, allows the federal government to control income and paves a path to tyranny.
Few issues provide such an enduring occasion for political debate as the question of how to fund the federal government - the question of taxes. In recent years, we have approached national agreement that the current system is deeply and perhaps fatally flawed. Accordingly, politicians have presented various versions of what they call "fundamental reform".
But much of the talk of fundamental reform is really an effort to tinker with the existing tax system in order to help diffuse growing public discomfort and even outrage. Few political leaders are willing to consider the most necessary change because it would involve removing politicians from the gatekeeper role over income and resources of all Americans.
Real reform requires abolishing the income tax and returning to the system our founders intended. This means funding the federal government with tariffs, duties and excise taxes or sales taxes, not with the privacy destroying income tax. We should return to our nation's original tax.
Government controls decisions: Our founders frequently quoted a principle from William Blackstone's Commentaries on the laws of England. " A power over a man's resources is a power over his will." To control the resource base of a decision maker is to control his decisions. But the ultimate decision-maker in American life and politics must be the people. And the people cannot be free without a resource base of material comfort and sustenance free from government domination or control.
A tax system putting government in control of the people's income tends irresistibly to put government in control of political decisions as well. The founders sought to avoid this path to tyranny, so they declared a direct tax on the income of individuals unconstitutional.
The reversal of that wisdom came during the "progressive" era at the beginning of the 20th century. A mentality of class warfare prevailed at the time; a first flush of socialism in American life, and the income tax movement was one of its results. Setting farmers against industrialists, urban folk against rural, poor against rich, everyone was led to expect than an income tax would hit the other group harder. Chiefly, of course, the argument was that the rich would pay a disproportionate share. What they didn't tell us was that in this socialist scheme, everyone with a private dollar is suspected of being too rich.
We ought to have realized that the income tax is utterly incompatible with liberty. It is actually a form of slavery. A slave is someone the fruit of whose labor is controlled by somebody else. A slave is not somebody with nothing. Rather, he has only what the master lets him have.
Under the income tax, the government takes whatever percentage of the earner's income it wants. The income tax, therefore, represents our national surrender to the government of control over all the money we earn. There are, in principle, no restrictions to the pre-emptive claim the government has upon our income.
No American government has seriously pressed this claim on our income to its logical conclusion - the explicit demand that all income be handed over to the government and any private expenditures made subject to government approval. But we are deeply unwise to underestimate the power of the confiscatory principle in the hands of a government determined to pursue its advantage. The federal government could bankrupt the country in short order, merely by deciding to insist more aggressively than it already does on collecting the money we have already agreed it has the right to take. We must insist on the erection of constitutional protection, beyond the reach of any congress or president to override, of the fact that American citizens own the dollars they earn. Without such protection, we hold these dollars merely subject to the government's revocable permission.
The withholding tax system disguises this dangerous loss of control. One of the effects of withholding is that we don't even realize that government money is actually our money. Most of us think that only our net pay - our actual paycheck - is our money, and what is withheld is the government's money. We tend to think this because the government simply grabs part of the money we have earned.
I once heard a caller to a talk radio show object to the proposal that taxpayers cover the savings and loan debacle, demanding instead that the government pay for it, as though the government could pay for anything without using dollars taken from us.
Surrender of Privacy. The income tax threatens our liberty in many ways, but surely the most alarming and outrageous is its requirement that we surrender our privacy by exposing all the sources of our income to the government. One of the prudent protections of liberty is to treat the government, which today seems to be your friend, as if tomorrow it could become your enemy. No army exposes all lines of supply and all resources even to its allies, much less to its potential enemies.
While our government is not our enemy in the traditional sense, our founders were ever mindful that liberty depends upon vigilance against the temptations of tyranny. That's why, if we mean to retain our freedom, it is our duty to maintain material resources for action that the government cannot control and manipulate. But with the income tax, we surrender the ability to maintain economic associations without the knowledge of the government.
RS